Economic benefits to nations in a currency union will be larger whenever:
A) the volume of transactions between the nations is larger and there is a greater degree of economic integration.
B) the volume of transactions is smaller but there is a greater degree of economic integration.
C) trade and financial flows between the nations are erratic.
D) financial integration is lower but cultural integration is higher.
Ans: A) the volume of transactions between the nations is larger and there is a greater degree of economic integration.
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The response of investment spending to an increase in the government budget deficit is called
A) private dissaving. B) expansionary investment. C) income minus net taxes. D) crowding out. Figure 21-5
Based on the record of past business cycles as well as Fed behavior, we can estimate that for expansionary monetary policy the overall lag is approximately
A) eighteen months, about half of which is the effectiveness lag. B) twenty months, slightly more than three-quarters of which is the effectiveness lag. C) ten months, with less than half due to the effectiveness lag. D) nine months, with the effectiveness lag responsible for about six months.
Since 1962, which of the following federal expenditures, measured as a percentage of GDP, has increased the most?
A) Social Security B) Medicare and Medicaid C) net interest D) defense
A pecuniary diseconomy occurs when
A. supply exceeds demand. B. higher output levels results in the same unit costs. C. higher output levels results in lower unit costs. D. an expansion of industry output increases the price of an input.