Interest rates spreads between long-term and short-term Treasury bills ________
A) are countercyclical
B) are good predictors of recessions
C) are a lagging indicator
D) all of the above
E) none of the above
B
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Based on Table 3.1, which country or countries has an absolute advantage and a comparative advantage in shoes?
A) Mexico has an absolute and comparative advantage in shoes. B) The United States has an absolute and comparative advantage in shoes. C) The United States has a comparative advantage, and Mexico has an absolute advantage in shoes. D) Mexico has a comparative advantage, and the United States has an absolute advantage in shoes. E) There is not enough information to tell.
The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.