- The most likely argument against high national debt levels is that:A the debt is owed internally to fellow citizens.B they create disincentives for economic activity.C they may finance investment in physical and human capital.
- De quoi fut fait l'empire: Les guerres coloniales au XIXe siècleGuerres d'Afrique. 130 ans de Guerres coloniales
- Which of the following best describes a fundamental assumption when mone- tary policy is used to influence the economy?A Financial markets are efficient.B Money is not neutral in the short run.C Official rates do not affect exchange rates.
- Suppose Mexico exports vegetables to Brazil and imports flashlights used for mining from Brazil. The output per worker per day in each country is as follows:Flashlights VegetablesMexico 20 60 Brazil 40 80Which country has a comparative advantage in the production of vegetables and what is the most relevant opportunity cost?A Brazil: 2 vegetables per flashlight.B Mexico: 1.5 vegetables per flashlight.C Mexico: 1/3 flashlight per vegetable.
- Which of the following is the most likely example of a tool of fiscal policy?A Public financing of a power plant.B Regulation of the payment system.C Central bank's purchase of government bonds.
- Which of the following statements is the best description of the characteristics of economic indicators?A Leading indicators are important because they track the entire economy.B Lagging indicators, in measuring past conditions, do not require revisions.C A combination of leading and coincident indicators can offer effective forecasts.
- The spot rate on the New Zealand dollar (NZD) is NZD/USD 1.4286, and the 180-day forward rate is NZD/USD 1.3889. This difference means:A. interest rates are lower in the United States than in New Zealand.B. interest rates are higher in the United States than in New Zealand.C. it takes more NZD to buy one USD in the forward market than in the spotmarket.
- 6 Suppose three countries produce bananas and pencils with output per worker per day in each country as follows:Mexico Brazil CanadaBananas Pencils20 40 30 90 40 160Which country has the greatest comparative advantage in the production of bananas?A Canada.B Brazil.C Mexico.
- Which is the most accurate statement regarding central banks and monetary policy?A Central bank activities are typically intended to maintain price stability.B Monetary policies work through the economy via four independentchannels.C Commercial and interbank interest rates move inversely to official interest rates.
- What is the most important effect of labor productivity in a cost-push inflation scenario?A Rising productivity indicates a strong economy and a bias towards inflation.B The productivity level determines the economy's status relative to its "natu-ral rate of unemployment."C As productivity growth proportionately exceeds wage increases, product price increases are less likely.
- Monetarists are most likely to believe:A there is a causal relationship running from inflation to money.B inflation can be affected by changing the money supply growth rate.
- A prolonged period of an official interest rate very close to zero without an increase in economic growth most likely suggests:A quantitative easing must be limited to be successful.B there may be limits to the effectiveness of monetary policy.C targeting reserve levels is more important than targeting interest rates.
- In a recession, companies are most likely to adjust their stock of physical capital by:A selling it at fire sale prices.B not maintaining equipment.C quickly canceling orders for new construction equipment.
- The characteristic business cycle patterns of trough, expansion, peak, and con- traction are:A periodic.B recurrent.C of similar duration.
- A central bank will most likely allow the economy to self-correct in periods of:A high inflation, fast economic growth, and low unemployment.B low inflation, slow economic growth, and high unemployment.C high inflation, slow economic growth, and high unemployment.
- The least likely limitation to the effectiveness of monetary policy is that central banks cannot:A accurately determine the neutral rate of interest.B regulate the willingness of financial institutions to lend.C control amounts that economic agents deposit into banks.
- Monetarists favor a limited role for the government because they argue:A government policy responses may lag.B firms take time to adjust to systemic shocks to the economy.C resource use is efficient with marginal revenue and cost equal.
- If the GDP deflator values for Year 1 and Year 3 were 190 and 212.8, respec- tively, which of the following best describes the annual growth rate of the over- all price level?A 5.8%.B 6%.C 12%.
- According to the Austrian school, the most appropriate government response to an economic recession is to:A allow the market to adjust naturally.B maintain steady growth in the money supply.C decrease the market rate of interest below its natural value.
- Tous les Etats-nations ne furent, ni ne sont démocratiques ; mais là où sont nées des démocraties au sens occidental, elles ont pris la forme de l'Etat-nation