What role does ideology play in the debate on stabilization?
A. A large role because there are conservative and liberal economists.
B. A primary role because there are no economic aspects to the debate at all.
C. A minor role because economists are fairly uniform in their political views.
D. No role at all because this is purely a technical question.
Answer: A
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Nominal GDP is another term for
a. current dollar GDP. b. constant dollar GDP. c. adjusted dollar GDP. d. relative value GDP.
The government finances the budget deficit by
a. borrowing from the public. b. borrowing solely from the Federal Reserve Bank. c. printing currency in the amount of the budget deficit. d. requiring that budget surpluses occur every other year to pay off the deficits.
An undervalued exchange rate is an exchange rate:
A. that equals the number of units of a foreign currency over the number of units of domestic currency. B. that has an officially fixed value greater than its fundamental value. C. that has an officially fixed value less than its fundamental value. D. at which the quantities of currencies demanded and supplied in the foreign exchange market are equal.
First, briefly explain why the AD curve is downward sloping in a closed economy. Second, briefly explain why the AD curve is downward sloping in an open economy under fixed exchange rates. And finally, briefly compare the size of the slopes of the two AD curves
What will be an ideal response?