In the past few years, the demand for donuts has greatly increased. This increase in demand might best be explained by:
A. an increase in the cost of making donuts.
B. an increase in the price of coffee.
C. consumers expecting donut prices to fall.
D. a change in buyer tastes.
Answer: D
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The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
Which of the following was not a factor contributing to the debt crisis in Latin America?
(a) The oil shocks. (b) Trade liberalization in many developing countries. (c) An increase in global interest rates. (d) A lack of investment opportunities in the developed countries. (e) All of the above.
Countries like Malaysia and Thailand that tried to maintain overvalued currencies in the late 1990s inevitably faced increased
A. balance of payments surpluses. B. runs on their currencies. C. balance of payments deficits. D. both b and c.
The establishment of the NAFTA agreement
A. was supported by most economists and people in the business community. B. has led to the loss of millions of U.S. jobs to Mexico. C. has more economic integration than the European Union. D. eliminated all internal tariffs among its three members.