Fiscal policy suffers from the problem of:
A. being slow to implement.
B. being formulated and implemented by politicians subject to short-run incentives.
C. being influenced by special interest groups.
D. all of the answers given are correct.
Answer: D
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Refer to Mexico and Japan. Which of the following statements is true.
a. Mexico has a comparative advantage in production of food.
b. Japan has an absolute advantage in production of food.
c. Mexico has a comparative advantage in production of cloth.
d. Japan has an absolute advantage in production of Cloth.
If firms and workers could predict the future price level exactly, the short-run aggregate supply curve would be
A) downward sloping. B) horizontal. C) upward sloping. D) vertical.
Which of the two features of the IMF Articles of Agreement helped promote flexibility in external adjustment?
A) IMF members helped countries maintain full employment. B) IMF allowed countries to attain internal balance. C) New countries would enter the agreement if they fixed their exchange rate. D) IMF members contributed their currency to form a pool of resources that IMF could lend to countries in need and parities in the exchange rate against the dollar could be adjusted with agreement of IMF. E) IMF members argued against the use of floating exchange rates.
In the quantity theory of money, which of these variables is endogenous?
A) the price level B) the velocity of money C) real output D) the money supply E) none of the above