Figure 33-8
?

In Figure 33-8, which of the following movements illustrates the response of the economy to an increase in aggregate demand when expectations are “rational”?

Advocates of floating rate suggested it is favorable for economies for all of the following reasons EXCEPT

A) it discourages attack from foreign exchange speculators because of the fact that exchange rate adjustment is immediate. B) it helps stabilize the shock effect on unemployment in case of economic changes such as fall in export demand. C) it automatically matches the domestic inflation with ongoing foreign inflation. D) it gives every country the opportunity to guide its own monetary conditions at home. E) it brings the LR exchange rate to the level predicted by PPP without government policy decisions.

Based on the data in Table 2-7, recessions in the U.S. are

a. irregular in length but evenly spaced. b. rare. c. regularly spaced and regular in length. d. irregular in length and irregularly spaced.