Internationally, recessions
a) are likely to begin in the smallest economies and spread to larger ones
b) are isolated events, uncorrelated across countries
c) in one region mean that world demand has shifted elsewhere, so other countries do not fall prey to downturns at the same time
d) are especially contagious among trade partners
e) are most pronounced among Socialist countries
d) are especially contagious among trade partners
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If the current account is in surplus and the capital account is zero, then
A) net exports must be positive. B) the balance of payments must be in surplus. C) the financial account must be in deficit. D) there is a capital inflow.
During the early 1930s, the Fed was reluctant to rescue nonsolvent banks out of fear of encouraging:
A) moral hazard B) adverse selection C) bank run D) sovereign debt crisis
Which of the following will most likely occur in the United States as the result of an unexpected rapid growth in real income in Canada and Mexico?
a. an increase in aggregate demand and output in the short run b. an reduction in aggregate demand and output in the short run c. a reduction in the price level d. a decrease in the natural rate of unemployment in the United States
Regulatory commissions may focus on establishing a "fair-return" price to be charged by a monopolist. Under this policy, the monopolist would earn:
A. positive economic profits. B. zero economic profits. C. negative economic profits. D. monopoly profits.