A variety of indicators such as goods and labor market integration, differing unemployment rates, and the lack of fiscal federalism have prompted most economists to:
A) herald the success of the Eurozone.
B) conclude that the Eurozone has performed better than the United States in nearly every category.
C) conclude that the Eurozone has not been (and is not now) an optimal currency area going back to the 1990s.
D) recommend changes to the new currency to make it more responsive to demand shocks.
Ans: C) conclude that the Eurozone has not been (and is not now) an optimal currency area going back to the 1990s.
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According to the above table, what is the absolute price elasticity of demand if price falls from $8.00 to $7.50?
A) 4.00 B) 2.82 C) 1.80 D) 1.21
A recent study showed that an increase in the price of gasoline promoted carpooling among office commuters. If gasoline is an important component in the fixed basket of goods used to calculate the Consumer Price Index, it will fail to reflect true changes in the cost of living of an average consumer because of the: a. quality bias
b. substitution bias. c. new good bias. d. quantity bias.