When wages are viewed as benefits instead of costs of a project, it is an example of the
A. labor game.
B. chain-reaction game.
C. double-counting game.
D. dating game.
A. labor game.
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Refer to Figure 26-5. In the figure above, the movement from point A to point B in the money market would be caused by
A) an open market sale of Treasury securities by the Federal Reserve. B) an increase in the price level. C) a decrease in real GDP. D) an increase in the required reserve ratio by the Federal Reserve.
The main policy advice given by the IMF to East Asian countries facing the financial crises of 1997/1998 was
A) raising their domestic interest rates to stabilize the collapsing currencies. B) using their monetary and fiscal policies alone. C) use capital controls. D) adopting a flexible exchange rate system. E) adopting a fixed exchange rate system.
If the expenditure schedule must be shifted downward to reach potential GDP, then the economy is experiencing a(n)
A. inflationary gap. B. precautionary gap. C. restrictive gap. D. expansionary gap.
Why are cooperative arrangements difficult to negotiate and maintain?
A) They require a long-term policy commitment, but politics is often focused on the short run. B) No one understands the benefits and consequences. C) Trading nations do not trust one another. D) They have to be approved by the IMF, which takes years to accomplish.