The vicious circle of poverty makes it difficult for an LDC to:
a. establish political institutions. b. control inflation.
c. save and invest. d. fix its exchange rate.
c
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Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. lower; higher D. higher; potential
The movements of real GDP and inflation during the 1973-1975 recession can be best explained by a:
a. rightward shift of the aggregate demand curve. b. leftward shift of the aggregate demand curve. c. rightward shift of the aggregate supply curve. d. leftward shift of the aggregate supply curve.
Although the Fed can destroy money, it is impossible for the Fed to create money out of thin air
Indicate whether the statement is true or false
Suppose the MPC in the economy in Figure 10.2 equals 0.8 and the shift from AD0 to AD1 was caused by a decrease in investment of $30 billion. What will the total decrease in aggregate demand be (i.e., AD0 to AD2) as a result of the initial $30 billion decrease?
A. $240 billion. B. $150 billion. C. $37.5 billion. D. $130 billion.