How were macroeconomic balances different in the period from 2000 to 2007 from past financial crises?
What will be an ideal response?
There was not an issue with devaluing exchange rates but rather the imbalances were between high saving, current account surplus nations and low savings, current account deficit nations which kept interest rates low and contributed to the housing bubble.
You might also like to view...
If the aggregate demand curve and the aggregate supply curve intersect at a level of real GDP more than potential GDP, there is
A) a below-full employment equilibrium. B) a rising real GDP. C) a falling price level. D) an inflationary ga
When the Fed lowers the federal funds rate, it can lead to
A) the Fed selling government securities. B) an increase in lending by banks. C) a decrease in demand deposits. D) a decrease in the quantity of money.
One reason demand curves slope downwards is
a. Marginal value increases with each purchase b. Marginal value declines with each purchase c. Total value declines with each purchase d. All of the above
A firm's revenue is price per unit times the quantity sold, so an increase in price decreases revenue if demand is elastic.
a. true b. false