Monetarists believe the best way to halt inflation is to
a. put more money into the economy
b. raise taxes
c. slow the growth rate of the money supply
d. impose controls on prices
e. none of the above
Question 2 - Given that food production is crucial to an economy, why shouldn't governments subsidize farmers' water use?
What will be an ideal response?
Question 3 - In equilibrium, the real value of household income must equal
A) the real value of output produced by firms.
B) the real value of all expenditures.
C) the sum of all goods produced in a year.
D) net GDP.
Question 4 - The advantage of an effective exchange rate is
A) it gives us an accurate gauge for the strengthening or weakening of a currency.
B) it uses a weighted average of bilateral exchanges based on the country's trading partners.
C) unreliable because its using different weights to reflect trade flows.
D) A and B.
Question 5 - The purpose of commodity buffer stocks is
(a) to moderate price fluctuations.
(b) to raise commodity prices.
(c) to encourage commodity substitution.
(d) to guarantee national security.
Question 6 - What are the main differences between the linear stages and international dependency models of development?
What will be an ideal response?
Question 7 - An argument supporting promotion of the urban informal sector is
(a) the formal sector is incapable of providing enough employment.
(b) informal sector workers are poorly educated.
(c) it uses a relatively high capital intensity.
(d) it would reduce urban bias.
Question 8 - The main losers from inflation are those who
a. have significant assets in real property
b. have fixed incomes
c. have put their money in foreign banks
d. sell products that have a quick turnover
e. none of the above
Quick Reply
