In which of the periods below was the inflation-adjusted deficit largest?
A. The 1980s
B. The 1950s
C. The 1960s
D. In 2009-2011
Answer: D
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Assume that Brazil and Mexico have floating exchange rates. All else held constant, if the price level is stable in Mexico but Brazil experiences rapid inflation then ________.
A. the Brazilian real will appreciate B. the Brazilian real will depreciate C. gold bullion will flow into Brazil D. the Mexican peso will depreciate
What, according to the textbook, accounts for the federal budget surplus in the late 1990s?
A) A move toward virtue on Capital Hill B) Strong economic growth during that period C) Huge increases in tax rates D) A successful beggar-thy-neighbor strategy
A few economies have the interesting characteristic that exports are more than 100 percent of the economy's GDP. How is this possible?
What will be an ideal response?
When does a subsidy that benefits consumers result in a more efficient allocation of a resource?
A) when the good being produced or consumed is not scarce B) when the good being produced or consumed generates a negative externality C) when the good being produced or consumed generates a positive externality D) when the equilibrium price of the good is one that consumers don't like