Which of the following statements is correct?
I. The ERM used the Deutsche Mark as the base or center currency.
II. The ERM allowed the Italian central bank autonomy over its policies.
III. The ERM allowed the Bundesbank monetary autonomy.
A) I only
B) II only
C) III only
D) I, II, and III
Ans: D) I, II, and III
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Suppose you have borrowed money from a bank to buy a house. Which of the following will happen if the inflation rate unexpectedly rises?
A) You will be worse off. B) The real cost of your mortgage will rise. C) The bank's shareholders will be better off. D) You will be better off.
When people decide whether or not to get a flu vaccination, they ignore the ________ and as a result ________
A) marginal private benefit; too few vaccinations are given B) external benefit; too few vaccinations are given C) private cost; too many vaccinations are given D) marginal external cost; vouchers must be provided E) social cost; too many vaccinations are given
When a tax is levied on buyers, the
a. supply curves shifts upward by the amount of the tax. b. tax creates a wedge between the price buyers effectively pay and the price sellers receive. c. tax has no effect on the well-being of sellers. d. All of the above are correct.
The vertical axis in the AD-AS model shows:
A. the economy's real GDP growth rate. B. the economy's inflation rate. C. the economy's short-term interest rate. D. the economy's nominal GDP growth rate.