In any economy functioning at potential gdp there are

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Principles of Macroeconomics
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Chapter 12 / Exercise 2
Principles of Macroeconomics
Mankiw
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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?
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Principles of Macroeconomics
The document you are viewing contains questions related to this textbook.
Chapter 12 / Exercise 2
Principles of Macroeconomics
Mankiw
Expert Verified
Reference: Explanation: Type: Multiple Choice46.Despite many negative feelings, a number of governments have decided that reducing barriers to trade is at least potentially beneficial to their economy. Which of the following is an example of countries reducing barriers through free trade?A. NAFTAB. NATOC. G20D. GTOAnswer: A
Reference: Explanation: Type: Multiple Choice47.The U.S. trade deficit can disappear without raising legitimate concerns over disruption to the economy if:
Reference: Explanation: Type: Multiple Choice48.A trade balance can be quickly defined as the gap between _____________, which are also included in the current account balance along with _______________________.
Reference: Explanation: Type: Multiple Choice
Essay Questions1.In thinking about how nations around the world should pursue the goal of raising their standard of living, economists find it useful to divide those nations into three groups. Identify and briefly describe each group, and include examples of nations that would be classified within each particular group.

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