The price of a barrel of oil doubled between 2007 and the middle of 2008. To make matters worse, a financial crisis hit the U.S. economy starting in August of 2007. Which of the following is TRUE of the Chinese experience?
A) The worldwide decline in demand led to a collapse of Chinese exports.
B) Instead of relying solely on the economy's self-correcting mechanism, much more aggressive fiscal expansions than those of the U.S. (in addition to a substantial monetary easing) served to shift the AD curve back to general equilibrium relatively quickly.
C) The Chinese economy was better able than the U.S. economy to weather the financial crisis with output growth starting to grow earlier and more quickly than that of the U.S.
D) All of the above.
E) None of the above.
D
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The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
The Keynesian portion of the short-run aggregate supply (SRAS) curve implies
A) a downward slope. B) no price level changes. C) flexible prices and wages. D) an upward slope.
Refer to Table 2-11. If the two countries specialize and trade, who should export digital cameras?
A) South Korea B) China C) There is no basis for trade between the two countries. D) They should both be importing digital cameras.
The Coase Theorem states that there is different ways to assign property rights if the private sector is to achieve environmental efficiency
a. True b. False Indicate whether the statement is true or false