If the economy is in a structural stagnation, it can be expected to return to its historical trend soon.
Answer the following statement true (T) or false (F)
False
With a structural stagnation, there are long-term structural problems that will keep the economy from returning to his historical trend until the government addresses these problems.
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Assume that foreign capital flows into a nation rise due to expected increases in stock market appreciation. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the real GDP and current international transactions balance in the context of the Three-Sector-Model? a. Real GDP falls and current international transactions balance becomes
more negative (or less positive). b. Real GDP rises and current international transactions balance becomes more negative (or less positive). c. Real GDP and current international transactions balance remain the same. d. Real GDP rises and current international transactions balance remains the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the short run would be:
A. P1 and Y2. B. P2 and Y3. C. P3 and Y1. D. P2 and Y2.
Assume that movement from point A to point B represents a 15 percent change in the price of goods and services. What would be the corresponding change in the price of inputs?
a. no change
b. 15 percent increase
c. 15 percent decrease
d. 100 percent increase
The Coase theorem will apply only if
A. the courts can be used to determine the amount of compensation that must be made to the damaged party. B. the number of people involved is small. C. the amount of compensation that must be made to the damaged party is small. D. an individual who is not affected by the externality can negotiate a settlement between the parties imposing the externality and the parties that are harmed by the externality.