How would you define convergence?
A) tendency for gaps between industrial countries' per-capital incomes to narrow
B) tendency for gaps between all countries' per-capital incomes to narrow
C) the theory that a crisis in a low-income country will spread to all countries, regardless of debt structure
D) the theory that a crisis in a low-income country will spread to only those countries which had lent money to the original country
E) tendency for the world distribution of income to be persistently unequal
A
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In the Keynesian model, suppose the Fed sets a target for the real interest rate. If the IS curve shifts to the left, and the Fed wants to keep output unchanged
A) taxes will increase. B) the money supply will decline. C) the real interest rate will decrease. D) taxes will decrease.
Refer to the above figure. Profits for this firm will be maximized at
A) point B. B) point C. C) a quantity greater than point C. D) a quantity between points B and C.
The difference between moral hazard and adverse selection is that moral hazard is about:
A. unobserved characteristics of people occurring before parties enter into an agreement. B. never happens when adverse selection is a problem. C. actions that arise after the parties enter an agreement D. None of these statements is true.
How are aggregate supply and stagflation related?
a. Stagflation usually causes an adverse shift in aggregate supply. b. An adverse supply shift usually causes stagflation. c. Stagflation only follows inflation, with no relation to aggregate supply. d. There is no relationship between the two.