As market integration and symmetry between the nations' economies rise, the:
A) net benefits of a currency union fall.
B) OCA becomes less desirable for each nation.
C) political costs of a currency union rise.
D) net benefits of a currency union rise.
Ans: D) net benefits of a currency union rise.
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Two drawbacks in using fiscal policy as a stabilization tool are that fiscal policy can affect ________ as well as aggregate demand and that fiscal policy is ________.
A. consumption; offset by automatic stabilizers B. potential output; not flexible enough C. potential output; offset by automatic stabilizers D. consumption; too flexible
American manufacturers rapidly dropped waterwheels when the steam engine was introduced
Indicate whether the statement is true or false
If marginal cost is less than average cost, average cost must fall when more units are produced
a. True b. False Indicate whether the statement is true or false
Which of the following is NOT a commitment device?
A. A pre-nuptial agreement that provides for a large penalty in the event a spouse has an affair. B. A non-refundable advance payment to reserve a room at a resort. C. High fines for illegal parking on campus. D. A manufacturer's 2-year agreement to fix, at no cost to you, anything that breaks on your computer.