The most commonly accepted cause of the European Crisis is:
a. Fiscal profligacy
b. Too little welfare spending
c. Unemployment
d. Current account deficit
Question 2 - Assume that the expectation of declining housing prices cause households to reduce their demand for new houses and the financing that accompanies it. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the GDP Price Index and net nonreserve-related international borrowing/lending in the context of the Three-Sector-Model?
a. The GDP Price Index falls, and net nonreserve-related international borrowing/lending becomes more negative (or less positive).
b. The GDP Price Index rises, and net nonreserve-related international borrowing/lending becomes more negative (or less positive).
c. The GDP Price Index falls, and net nonreserve-related international borrowing/lending becomes more positive (or less negative).
d. The GDP Price Index and net nonreserve-related international borrowing/lending remain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
Question 3 - If Sally Smith creates VCU1 by playing an online game, the effect is to cause the nation's:
a. M2 money supply to remain the same.
b. M2 money supply to rise.
c. M2 money multiplier to rise.
d. Monetary base to fall.
Question 4 - Acceptance of the euro by the member state implies:
a. Common monetary policy
b. Common fiscal policy
c. Common foreign policy
d. Common labor policy