Which of the following has NOT been a criticism of the "convergence process" for joining the Eurozone?
A) Although challenging, the process fully transforms inflation-biased nations into fiscal and monetary conservatives.
B) Policies forced on applicants to monetary union are politically costly, so the interim peg may not be fully credible and may generate exchange rate crises.
C) The fiscal rules are seen as inflexible and arbitrary.
D) Once a nation has met the criteria, its commitment to fiscal discipline may wane.
Ans: A) Although challenging, the process fully transforms inflation-biased nations into fiscal and monetary conservatives.
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An important difference between the demand for a private good and the demand for a public good is that
A) the resources used to provide public goods are common resources or government owned; the resources used to produce private goods are all privately owned. B) individuals reveal their preferences for a public good but they do not have to reveal their preferences a private good. C) the demand for a private good produces consumption externalities; the demand for a public good produces production externalities. D) individuals reveal their preferences for a private good but they do not have to reveal their preferences for a public good.
The marginal propensity to save is
a. the change in saving induced by a change in consumption b. (change in S) × (change in Y) c. 1 – MPC/MPC d. (change in Y – bY)/(change in Y) where b is the MPC e. 1 – MPC