Compare and contrast the U.S. economic record prior to 1940 and after 1950. How do the two time periods differ? What best explains the differences according to a macroeconomist?
What will be an ideal response?
The economy experienced business cycles of greater magnitude before 1940. Cycles after 1950 have been much less extreme. Before 1940, both inflation and deflation occurred. After 1950, inflation was a fairly constant condition and deflation never occurred over a prolonged period. Unemployment rates have been, on the average, much lower during the post-1950 time period. Most economists explain the superior economic performance of the post-1950 period to the use of Keynesian demand management stabilization policies that were implemented after World War II. The economy prior to 1940 could be described as “natural” or unmanaged. The economy after 1950 could be described as actively managed or stabilized.
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Refer to the scenario above. If the government of India wants to repay a lower sum of money to the U.S., it should:
A) buy both dollars and rupees. B) sell both dollars and rupees. C) buy dollars and sell rupees. D) buy rupees and sell dollars.
On Thanksgiving, Jake's mother gives him a huge platter of food. If Jake were to keep eating just to please his mother (even when he really wanted to stop), his marginal utility would be:
a. the same as his total utility. b. large. c. minus one. d. positive. e. negative.
When an exchange rate is determined strictly by the demands and supplies for a nation's currency, it is called:
a. fixed. b. arbitrage. c. floating. d. unilateral. e. balance of payments.
Marginal damages
A. must always be considered in social marginal costs. B. must not be considered in social marginal costs. C. must sometimes be considered in social marginal costs. D. have nothing to do with social marginal costs.