A major contributing factor to the instability of money demand over the past 25 years is the:
A. introduction of credit cards.
B. introduction of financial instruments that pay higher returns than money but can be used as a means of payment.
C. Fed has changed the way the money aggregates are defined.
D. failure of many savings and loans.
Answer: B
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Developing countries have often attempted to establish cartels so as to counter the actual or perceived inexorable downward push on the prices of their exported commodities. OPEC is the best well known of these
How are such cartels expected to help the developing countries? At times importing countries profess support for such schemes. Can you think of any logical basis for such support? How are cartels like monopolies, and how are they different from monopolies. Why is there a presupposition among economists that such schemes are not likely to succeed in the long run?
Contractionary fiscal policy can lead to a depreciation of the nation's currency
Indicate whether the statement is true or false