Compared with a system of fixed exchange rates, currency unions are beneficial because they
A) restrict what countries can do with fiscal policy.
B) allow exchange rates to float.
C) allow every country to have an independent monetary policy.
D) eliminate the possibility of speculative attacks.
D
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Since classical economists and monetarists believe that the economy operates at full employment, real GDP, that is, along the vertical segment of aggregate supply:
a. any increase in the money supply can only end up raising the price level. b. any increase in the money supply can only end up lowering the price level. c. any decrease in the money supply can only end up raising the price level. d. changes in the money supply will not affect the price level. e. any increase in the money supply will cause both nominal and real GDP to increase.
The short run is the time period
A. In which only the amount of capital may be altered. B. Over which an investment decision can be made. C. In which some costs are fixed. D. Necessary so that profits can be earned from production.
Which of the following statements is correct?
A. Saving is high in less developed nations because the opportunities for consumption are limited B. For developing nations, the annual rate of population increase is about 5 percent C. Most of the labor forces of developing nations are engaged in light industrial production D. Investment is low in developing nations, making it difficult to increase productivity and incomes
An economist looks at rent controlled prices as an example of a
A. engaged price. B. price floor. C. price ceiling. D. equilibrium.