An optimum currency area is a geographic region
A) with inflation near zero.
B) that allows exchange rates to float.
C) that has fixed exchange rates.
D) for which the benefits of having a common currency exceed the costs.
D
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What does internalizing an externality refer to?
a) making certain government does not disrupt the internal workings of the market b) making buyers pay the full price for the products they purchase c) making certain that all market transaction benefits go to only buyers and sellers d) making buyers and sellers take into account the external effects of their actions
?Exhibit 10A-1 Aggregate demand and supply model
?Beginning from short-run equilibrium at point E2 in Exhibit 10A-1, the economy's movement to a new position of long-run equilibrium would best be described as:
A. ?a movement along the AD2 curve with a shift in the SRAS1 curve. B. ?a movement along the SRAS2 curve with a shift in the AD2 curve. C. ? a shift in the LRAS curve to an intersection at E1. D. ?no shift of any kind.