Keynes believed that expansionary fiscal policy could help get an economy out of an inflation.
Answer the following statement true (T) or false (F)
False
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In 1981-1983, the world economy suffered a steep recession. Naturally, the fall in industrial countries' aggregate demand had a direct negative impact on the developing countries
What other mechanism was an even more important contributor to this event? A) the immediate steep inflation that followed the recession B) the dollar's sharp depreciation in the foreign exchange market C) the increase in primary commodity prices, increasing terms of trade in many poor countries D) the collapse in primary commodity prices and the immediate, large rise in the interest burden that debtors had to pay E) the influx of defaulting credit
Which of the following is a reason that the number of bank failures has generally decreased over time?
a. Banks have been replaced by savings and loan associations. b. The overall riskiness of bank loans has decreased. c. The Federal Reserve stands ready to inject reserves into the banking system. d. All banks have been in good financial health. e. Banks hold most of their assets in the form of reserves.
The most basic concepts on which the social science of economics rests are
a. consumers and producers. b. money, interest rates, and exchange rates. c. supply and demand. d. scarcity and choice.
Wages in the United States are higher than those in Mexico primarily because
a. output per worker is higher in Mexico than in the United States. b. output per worker is higher in the United States. c. the human and physical capital of American workers is lower than that of their Mexican counterparts. d. all of the above are correct.