The term contagion refers to
A) a government's complete control over it's banking system.
B) a drop in interest rates across industrialized countries.
C) the vulnerability of healthy economies to crises generated by events elsewhere.
D) a directed attack on one market by a foreign market.
E) a side effect of international trade.
C
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Suppose that consumers expect that the price of a product will increase in the future. The result is that
A) the current supply of the product decreases. B) the current demand for the product decreases. C) the current demand for the product increases. D) the current supply of the product increases.
When interest rates are free from central bank manipulation, and fall due to an increase in household savings, this
A) provides an incentive for government to create a budget surplus. B) sends a "green light" signal for businesses to increase investment. C) has little impact on the macroeconomy. D) creates a "cluster of errors" and an inevitable recession.
If the demand for KFC chicken is price inelastic, a fall in the price of KFC chicken will raise the total revenue
Indicate whether the statement is true or false
During the recession of 2007-2009 in the United States, ________ relative to potential GDP
A) business fixed investment spending rose and net export spending declined B) consumption spending rose and residential construction spending declined C) federal government purchases rose and changes in business inventories declined D) net export spending rose and consumption spending declined