The IMF offers loans to developing countries in times of balance of payment constraints, but the IMF also faces strong criticisms because:
A. contractionary fiscal policy and expansionary monetary policy tend to be ineffective against balance of payment constraints.
B. contractionary fiscal and monetary policies are always undesirable for any developing country.
C. it employs economists that know little about developing countries and their economic affairs.
D. the conditions tend to be procyclical, therefore worsening the recessions.
Answer: D
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A consumer values a car at $30,000 and a producer values the same car at $20,000 . The transaction will not take place if a tax is imposed
a. equal to the seller surplus b. smaller than the total surplus c. larger than the total surplus d. smaller than the buyer surplus
The clearest sign of economic growth is a(n)
a. increase in nominal GDP. b. increase in real GDP. c. decrease in nominal GDP. d. increase in nominal GDP.
Suppose that along the aggregate demand curve, real GDP equals $15 trillion when the GDP deflator is 90. If the GDP deflator were 95, real GDP along the aggregate demand curve would equal
A. more than $15 trillion. B. more than $15 trillion but less than $15.8 trillion. C. less than $15 trillion. D. $15 trillion.
The kinked demand model of oligopoly assumes that:
A. Rivals will ignore price increases but will match price cuts B. Rivals will ignore price cuts but will match price increases C. The oligopolistic firms are colluding D. A firm faces a more elastic demand curve if it cuts its price, and less elastic if it raises price