42.In any economy functioning at potential GDP, there are occasions when the short-term aggregate supply curve unexpectedly shifts, causing inflationary pressures. Which of the following is considered to be a common cause of this type of shift?A. overoptimistic lending by banks B. sudden rise in input pricesC. a surge of export sales D. a wave of government spendingAnswer: B
Reference: Explanation: Type: Multiple Choice43.If an economy has a high level of trade in goods and services relative to GDP andits exports and imports are balanced, what value will the net flow of foreign investment be?
Reference: Explanation: Type: Multiple Choice44.With regard to the major issues involving trade imbalances, which of the following explains why smaller countries around the world should take some steps to limit flows of international capital?
Reference: Explanation: Type: Multiple Choice45.Why do smaller economies around the world typically face more volatile inflation?