Why do countries who are members of a currency union have difficulty in recovering from a recession?
What will be an ideal response?
Countries having a flexible exchange rate regime see their currencies depreciate during recessions and thus are able to increase net exports, stimulating the economy. This is not possible when a country is a member of a currency union unless the common currency is devalued. Therefore, these countries have difficulty recovering from recessions.
Economics
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"Full employment" is said to exist when the unemployment rate equals
A) zero. B) the cyclical unemployment rate. C) the structural unemployment rate. D) the natural unemployment rate.
Economics
Refer to the accompanying graph. What is the price elasticity of demand at point A?
A. 3 B. 2 C. 0.2 D. 0.33
Economics