By early 2010, which of the following situations existed in the Eurozone debtor nations?
A) They had resolved their bank failures and restored fiscal responsibility.
B) They had sought and received help from the United States and the IMF to finance their financial sector bailouts.
C) They were in worse shape as debt grew to alarming levels, external investors were worried, and their bond ratings plummeted.
D) By that time, the debtor nations had repaid more than 90% of outstanding external debt
Ans: C) They were in worse shape as debt grew to alarming levels, external investors were worried, and their bond ratings plummeted.
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The theory that real shocks to the economy are the primary cause of business cycles is
A) monetarism. B) Keynesian theory. C) real business cycle theory. D) Hamiltonian theory.
If households save $40 billion less at each level of income and the marginal propensity to consume (MPC) is 0.8, the aggregate expenditure line will _____
a. intersect the 45-degree line at a real GDP of $40 billion b. shift upward by $40 billion c. shift downward by $40 billion d. shift upward by $200 billion because of the multiplier mechanism e. shift downward by $200 billion because of the multiplier mechanism