The theory of optimal currency areas argues that social welfare is ________ when countries participate in ________
A) increased; a monetary union
B) decreased; a monetary union
C) increased; a managed float system
D) decreased; policy coordination
A
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Suppose the actual budget deficit remains unchanged when the economy falls into a recession. This is an indication that
A) fiscal policy was used during the recession. B) monetary policy was not used during the recession. C) fiscal policy was not used during the recession. D) monetary policy was used during the recession.
The DOLS estimator has the following property if Xt and Yt are cointegrated:
A) it is BLUE even in small samples. B) it is efficient in large samples. C) it has a standard normal distribution when homoskedasticity-only standard errors are used. D) it has a non-normal distribution in large samples when HAC standard errors are used.
Many disagreements among economists result because:
A) economists deal only with positive economics. B) economists sometimes make normative judgments. C) economics is a social science. D) economics deals so much with theories and models.
Article XX of the World Trade Organization allows trade restrictions
A. to promote the use of solar energy in developing countries. B. that are necessary to protect human, animal, or plant life or health. C. to protect domestic jobs. D. in the form of tariffs imposed on low-pollution products.