What is the purpose of the following figure?
What will be an ideal response?
The purpose of the figure is to show the inflation convergence within the six original EMS members. The figure shows the difference between domestic inflation and German inflation for six of the original EMS members. As of 1997 all national inflation rates were very close to the German levels. See Figure 20 in the textbook for a more updated figure.
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In a barter system individuals
A) find it impossible to specialize. B) must be entirely self-sufficient. C) find it difficult to specialize, but may be able to do so. D) will almost invariably specialize.
Economists argue competitive markets provide a "natural remedy" to discriminatory wage practices. Which of the following is widely recognized as a potential limit to the effectiveness of that natural remedy?
a. Some workers are members in unions. b. Some firms pay efficiency wages; others do not. c. Some customers are discriminatory in their buying habits. d. Some employees have accumulated more human capital than other employees.