In spite of the fact that unemployment rates were at a 30-year low in 1996-2000 . the United States economy also experienced
a. declining inflation.
b. balance of payments surpluses.
c. large budget deficits.
d. low growth.
a
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Assume that the central bank sells government securities in the open market. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to real GDP and monetary base in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium
a. Real GDP rises and monetary base rises. b. Real GDP rises and monetary base falls. c. Real GDP and monetary base fall. d. Real GDP and monetary base remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
An assumption behind the infant industry argument for tariff protection is that
A) foreign competitors are selling output below average cost. B) the domestic industry will be facing an upward adjustment in its average cost. C) the domestic industry will eventually gain comparative advantage in producing the good. D) the market needs additional competition to satisfy consumer demand.