Britain's 1992 recession is probably the result of:
A) the struggle to reconcile monetary and fiscal policy.
B) the adherence to the ERM, which required Britain to raise interest rates to maintain exchange parity.
C) high unemployment rates, which are a product of the generous welfare system.
D) poor planning for the conversion to the euro.
Answer: B) the adherence to the ERM, which required Britain to raise interest rates to maintain exchange parity.
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If property rights are not clearly defined and enforced, then
A) incentives for specialization based on comparative advantage are weakened. B) some potential gains from specialization and trade are lost. C) resources are devoted to protecting possessions rather than to production. D) All of the above answers are correct.
The agency that restricts insider trading is the
A) Federal Reserve System. B) Securities and Exchange Commission. C) Office of the Comptroller of the Currency. D) Federal Deposit Insurance Corporation.
Opportunity costs arise due to
a. Resource scarcity b. Interest rates c. Limited wants d. Preferences
John raises bees to pollinate his orchard. A couple of bees which escaped ended up pollinating his neighbor's orchard, so
A) John's neighbor has received an internal cost of John's bee-keeping. B) John's neighbor has received an external cost of John's bee-keeping. C) John's neighbor has received an external benefit of John's bee-keeping. D) None of the above is correct.