The ERM crisis in ______ affected the ability of nations to ______.
A) 2001; fully fund their military forces
B) 1996; allow labor to migrate between nations
C) 1980; maintain a healthy banking system
D) 1992; maintain fixed exchange rates without drastic domestic measures
Answer: D) 1992; maintain fixed exchange rates without drastic domestic measures
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Aggregate expenditure is the sum of
a. all types of spending by households and firms b. spending and savings by households c. spending by households and governments on final goods and services d. spending by households, government, firms, and foreigners on final goods and services e. all spending and saving by households, firms, and governments
The law of demand says that the lower the price, the
a. greater is the quantity demanded b. greater is the demand for the good c. smaller is the demand for the good d. smaller is the quantity demanded e. larger is the supply of the good
If savings exceeds investment at full employment, demand will fall short of total output.
Answer the following statement true (T) or false (F)
Use the following table with data for a private closed economy (an economy with only a private sector and no international trade) to answer the next question. All figures are in billions of dollars.Domestic Output or Income (RGDP = DI)Consumption$540$540560555580570600585620600640615660630If gross investment is $25 billion, the equilibrium level of real GDP will be
A. $620 billion. B. $600 billion. C. $640 billion. D. $660 billion.