A recent article about the US economy asked, “What is the price of low inflation?” In this context, the price is likely to be measured by
A. the value of comparative advantage.
B. the cost of externalities.
C. the increase in unemployment.
D. the drop in market value.
E. the opportunity cost of higher interest rates.
Answer: C
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A legitimate objection to the government issuance of "indexed" bonds is that they
A) are more of a drain on the Treasury than conventional bonds. B) can encourage inflation and weaken policy resistance to it. C) discourage saving when inflation is reduced. D) further discourage the use of money and thus increase shoe-leather costs.
China's high net exports must be balanced by:
A. low net capital outflows. B. high net capital inflows. C. high net capital outflows. D. low net imports.
Which of the following best describes the concept of laissez-faire?
a. Government should not intervene in the economy b. Government should actively intervene in the economy whenever it judges the action to be beneficial. c. Government should intervene in the economy only to promote short-term economic stability. d. Government should intervene in the economy only to maximize long-term growth rates. e. Government should intervene in the economy only when the economy is not at full employment or there is substantial inflation.
"International trade bestows benefits on countries through the international transmission of ideas." Do you agree or disagree? Explain
What will be an ideal response?