A financial crisis may develop into a vicious cycle due to:
a. a recession that worsens banking problems.
b. increased net capital inflows due to the crisis.
c. exchange rate depreciation that increases output.
d. banks becoming more liberal in granting loans.
Ans: a. a recession that worsens banking problems.
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The difference between GNP and GDP is
A) GNP includes income received from abroad and excludes income paid abroad. B) GNP excludes income received from abroad and includes income paid abroad. C) GNP includes exports and imports. D) GNP excludes exports and imports. E) GNP includes capital flows received from abroad and excludes capital flows to foreign countries.
The closer the Lorenz curve is to the diagonal, the more unequal the distribution of income
Indicate whether the statement is true or false
The expenditure approach to GDP accounting includes:
a. consumption b. investment. c. net exports. d. all of the above.
If, due to rising demand, the price of cotton rose 15 percent while the prices of other goods and services rose an average of 10 percent,
a. the relative price of cotton has risen and one would expect the output of cotton to rise as a result. b. the relative price of cotton has risen and one would expect the output of cotton to fall as a result. c. the relative price of cotton has fallen and one would expect the output of cotton to rise as a result. d. the relative price of cotton has fallen and one would expect the output of cotton to fall as a result.