Why has the IMF come in for widespread criticism for its handling of the Asian financial crisis?
A) It refused to make loans to any of the countries whose currencies were under speculative attack.
B) Its policies did not sufficiently punish speculators with losses, giving rise to moral hazard.
C) Its policies led to unsustainably low interest rates in a number of Asian countries.
D) Its policies failed to lead to sufficient hardship for citizens in a number of Asian countries, giving rise to moral hazard.
B
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The possibility of the endless cyclical preference is eliminated by the property of:
A. transitivity. B. more and better. C. diminishing marginal rate of substitution. D. completeness.
Assuming the law of one price, explain what the exchange rate between U.S. dollars and yen has to be if the price of steel in Japan is 15,000 yen per ton and the price in the U.S. is $125 per ton (assume no transaction costs).
What will be an ideal response?
In the long run, the supply curve
A. is less elastic than it is in the short run. B. is more elastic than it is in the short run. C. exhibits no change in elasticity at all. D. exhibits no systematic sequence of changes in elasticity.
An increase in future price expectations may act like a cost shock, shifting the aggregate supply curve to the left.
Answer the following statement true (T) or false (F)