Externalities exist because
A. private costs differ from social costs.
B. low productivity of workers in production.
C. too much government interference in the market.
D. private costs are equal to social costs.
Answer: A
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A flexible exchange rate system crisis involves
A) a revaluation of the currency. B) a rapid and uncontrolled depreciation of the currency. C) a decrease in the dollar value of the country's international debt. D) a sure political collapse of the ruling government. E) All of the above.
Besides world trade growth, what can explain the growth of international banking since the 1960s?
A) war in the Middle East B) government focus on banking regulation. C) an increase in world travel. D) the emergence of developing countries like China. E) desire of depositors to hold currencies outside the jurisdiction of the countries that issue them
Inaccurate prediction generally invalidates the use of theory in economics.
Answer the following statement true (T) or false (F)
In the late 1960s, economist Edmund Phelps published a paper that
a. argued that there was no long-run tradeoff between inflation and unemployment. b. disproved Friedman's claim that monetary policy was effective in controlling inflation. c. showed the optimal point on the Phillips curve was at an unemployment rate of 5 percent and an inflation rate of 2 percent. d. argued that the Phillips curve was stable and that it would not shift.