Average weekly hours in manufacturing is an example of a:
A) leading indicator.
B) coincident indicator.
C) lagging indicator.
D) none of the above.
A
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Because the value of the euro is determined by factors that affect the entire euro zone, during the recession of 2007-2009, individual countries using the euro
A) were able to use expansionary monetary policy to lessen the impact of the recession. B) were unable to have their exchange rates depreciate. C) were more insulated from unemployment increases than most countries. D) experienced a greater increase in exports than did most countries.
What is called for with heterodox stabilization policies?
What will be an ideal response?
The rational expectations theory indicates that expansionary policy will:
A. stimulate real output in the long run but not in the short run. B. expand real output and employment if the public quickly anticipates the effects of the expansionary policy. C. equalize real and nominal interest rates during lengthy periods of inflation. D. fail to increase employment because individuals will anticipate it and take actions that will offset its impact.
Because automatic stabilizers lower transfer payments and raise tax receipts as an economy recovers from a recession, they:
A. slow down the pace of an economic recovery. B. accelerate the recovery from a recession until inflation starts to develop, at which point they slow the recovery. C. do not affect the pace of an economic recovery. D. increase the pace of an economic recovery.