As countries that currently use the euro, what are the two ways that Spain and Greece could reduce the prices of their exports and of their domestic goods to remain competitive with their trading partners?
What will be an ideal response?
1. They could lower inflation rates to below those of their major trading partners.
2. They could abandon the euro and allow their new currencies to depreciate against the euro.
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The shape of the aggregate demand curve does not tell us anything about how the total dollar value of spending will ultimately be divided between output and prices. For this we need
A) information about the standard of living in the country. B) information that only the Consumers' Price Index can provide. C) an aggregate supply curve. D) to know how far from the origin the aggregate demand curve is.
Which of the following market structures describe an industry in which a group of firms formally agree to control prices and output of a product?
a. Perfect competition b. Oligopoly c. Cartel d. Monopoly