A period in which real GDP in the economy declines for at least six months is referred to as:
A. long term growth.
B. a recession.
C. a positive fluctuation.
D. living standards.
Answer: B
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Which of the following macroeconomic variables is countercyclical?
A) Real interest rates B) Unemployment C) Money growth D) Consumption
Why does the segmented markets theory suggest think that bonds of different maturities are not perfect substitutes for each other?
What will be an ideal response?
A lesson that policymakers should learn from the Argentinean experience with currency boards is:
A. they never work. B. poor fiscal policies can undermine any monetary policy regime. C. a flexible exchange rate is always preferred to a pegged exchange rate. D. the only fixed exchange rate that works is the gold standard.
Which of the following is true if a country specializes in producing the goods for which it has a comparative advantage and then trades?
A. Output increases, and everyone in the economy benefits. B. Income is redistributed toward import-competing industries. C. There are gainers and losers, but the country as a whole is better off. D. Losers may outweigh the gainers, and a country may be worse off.