A recent article in the Financial Times summarizes and criticizes the standard approach to focusing responsibility for the Eurozone debt crisis, for which it blames:
A) the operations of the ECB.
B) the restraint on borrowing, which is an integral part of the Eurozone convergence criteria.
C) the irresponsibility of the ECB for funding domestic bank purchases of their government's bond issues.
D) speculators, irresponsible fiscal deficits, and poor risk assessment.
Ans: D) speculators, irresponsible fiscal deficits, and poor risk assessment.
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Between 2015 and 2016, if an economy's exports rise by $8 billion and its imports fall by $8 billion, by how much will GDP change between the two years, all else equal?
A) The increase in exports is offset by the decrease in imports, so there is no change in net exports and no effect on GDP. B) Net exports will decrease GDP by $8 billion. C) Net exports will increase GDP by $8 billion. D) Net exports will increase GDP by $16 billion.