Figure 11-1
?
In Figure 11-1, the economy is experiencing a(n)
A. inflationary gap equal to EF.
B. inflationary gap equal to ET.
C. recessionary gap equal to ET.
D. recessionary gap equal to FT.
Answer: C
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East Asia's crisis was relatively long lived because
A) East Asia's financial institutions had encouraged borrowing all together. B) East Asia's financial institutions had encouraged heavy borrowing in local currency. C) East Asia's financial institutions had extended low-interest loans. D) East Asia's financial institutions had extended high-interest loans. E) East Asia's financial institutions had encouraged heavy borrowing in dollars.
U.S. reserve requirements
A) are rejected by half the banks operating in the United States. B) show how regulatory asymmetries can operate to enhance the profitability of Eurocurrency trading. C) tend to harm the bank's business and decrease monetary aggregates. D) force banks to hold a portion of its assets in a liquid form easily mobilized to meet sudden deposit outflows. E) remain in place, but capital requirements have begin defaulting.
If the Fed adopts a contractionary monetary policy, eventually we can expect: a. aggregate demand to increase
b. short-run aggregate supply to decrease. c. interest rates to decrease. d. planned investment expenditures to decrease. e. real Gross Domestic Product to increase.
The concept of opportunity cost is more applicable to society as a whole than it is for an individual household
a. True b. False Indicate whether the statement is true or false