The J-curve illustrates which of the following?
A) the effects of depreciation on the home country's economy
B) the immediate increase in current account caused by a currency depreciation
C) the gradual adjustment of home prices to a currency depreciation
D) the short-term effects of depreciation on the current account
E) the Keynesian view of international trade dynamics
D
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One reason for the controversy surrounding the decision by the European Central Bank to buy Greek bonds was that:
A) it may increase moral hazard by encouraging other European governments to issue more debt than private investors were willing to buy B) it may increase adverse selection by encouraging other European governments to issue more debt than private investors were willing to buy C) it may result in higher risk premiums as private investors anticipate a default by Greece D) it may worsen the Greek recession by increasing Greek interest rates
The value of the marginal product is equal to the marginal revenue product under perfect competition in the product market because:
a. price is equal to average revenue. b. price is equal to average cost. c. marginal revenue is equal to marginal cost. d. price is equal to marginal revenue. e. average revenue is equal to average cost.