The majority of countries in the world have some type of fixed exchange rate system
Indicate whether the statement is true or false
TRUE
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
We know that in antiquity, China exported silk because no one in any other country knew how to produce this product. From this information we know that
A) China had a comparative advantage in silk. B) China had an absolute advantage, but not a comparative advantage in silk. C) no comparative advantage could exist because the technology was not diffused. D) China exported silk for political reasons even though it had no comparative advantage. E) China was unable to profit by exporting silk because it was unknown in the rest of the world.
Workers’ reluctance to take nominal pay cuts offers a feasible explanation of why the Phillips Curve relation breaks down when there is deflation.
a. true b. false
(Figure: Long-Run Aggregate Supply Curves) Which of the following can explain the shift of the long-run aggregate supply curve from A to C in the figure?
What will be an ideal response?