When nations enter into currency unions, their fiscal affairs continue to be separate. The exception to this situation is whenever a confederation of states has a system:
A) whereby monetary policy is decided by consensus rather than centrally.
B) of government subsidies for firms exporting outside the union.
C) of fiscal mechanisms that permits interstate transfers.
D) of common tax policies and regulatory rule.
Ans: C) of fiscal mechanisms that permits interstate transfers.
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In the above figure, assuming Firm 1 and Firm 2 are the sole producers in the industry, the industry quantity supplied at price P2 is equal to
A. Q1 + Q3. B. Q1 + Q2. C. Q2 + Q4. D. Q4 - Q2.
If the Fed orders a contractionary monetary policy, describe what will happen to the following variables relative to what would have happened without the policy:
a. The money supply b. Interest rates c. Investment d. Consumption e. Net Exports f. The aggregate demand curve g. Real GDP h. The price level
The market in which households supply their savings to firms that demand funds in order to buy capital goods is the ________ market.
A. investment B. money C. capital D. savings
When discussing pass through effects, it is fair to say
A) that the degree of pass through varies across nations, time and industries. B) that the degree of pass through varies across nations. C) that the degree of pass through varies across time and industries. D) that the degree of pass through varies across industries.