Economic growth is:
a. a movement along the production possibilities curve.
b. a change in the combination of the economy's outputs.
c. an outward shift of the production possibilities curve.
d. difficult to determine for any one year.
c
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Suppose that country A pegs its currency to the currency of country B. Which of the following will NOT be a benefit of this arrangement to country A?
A) lower transactions costs for A to conduct international trade with country B B) increased capital flows between the two countries because of increased certainty of future exchange rates C) decreased migration between the two countries because of increased certainty of future exchange rates D) lower costs of economic transactions costs between the two countries, leading to welfare gains for country A
If we observe an economy in which desired saving has changed, but there has been no change in actual investment, we may infer that ________
A) net exports have changed B) actual saving has changed C) the domestic real interest rate has not changed D) all of the above E) none of the above