To “cure” their balance of payments deficits without altering exchange rates, Southeast Asian countries in 1997 were forced to create
A. more inflation.
B. recessions.
C. faster economic growth.
D. money at an accelerated rate.
Answer: B
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Real money supply expresses the money supply in terms of real goods and services
Indicate whether the statement is true or false
Suppose the firms in a monopolistically competitive market are incurring economic losses. What will happen to move the market to its long-run equilibrium?
A) More close substitutes will appear in the market until economic profits are zero. B) The firms that dropped out of the market will reenter once the level of economic losses is zero. C) Firms will continue to exit the market until economic losses are equal to zero. D) The demand functions of all the firms remaining in the market will become relatively more elastic.
Deposit insurance has not worked well in countries with
A) a weak institutional environment. B) strong supervision and regulation. C) a tradition of the rule of law. D) few opportunities for corruption.
The most common definition that monetary policymakers use for price stability is
A) low and stable deflation. B) an inflation rate of zero percent. C) high and stable inflation. D) low and stable inflation.