« previous next »

Author Question: Why do countries who are members of a currency union have difficulty in recovering from a recession? ... (Read 16 times)

jazziefee

  • Hero Member
  • *****
  • Posts: 505
on: Jun 30, 2018
Why do countries who are members of a currency union have difficulty in recovering from a recession?
 
  What will be an ideal response?

Question 2

Moving along the aggregate supply curve, when the price level rises,
 
  A) the quantity supplied decreases.
  B) the quantity supplied increases.
  C) the aggregate demand curve shifts rightward.
  D) the aggregate demand curve shifts leftward.
  E) the quantity supplied does not change because the aggregate supply curve is a vertical line.


ErinKing

  • Sr. Member
  • ****
  • Posts: 362
Reply #1 on: Jun 30, 2018
Answer to Question 1

Countries having a flexible exchange rate regime see their currencies depreciate during recessions and thus are able to increase net exports, stimulating the economy. This is not possible when a country is a member of a currency union unless the common currency is devalued. Therefore, these countries have difficulty recovering from recessions.

Answer to Question 2

B


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

In ancient Rome, many of the richer people in the population had lead-induced gout. The reason for this is unclear. Lead poisoning has also been linked to madness.

Did you know?

In ancient Rome, many of the richer people in the population had lead-induced gout. The reason for this is unclear. Lead poisoning has also been linked to madness.

Did you know?

There are more sensory neurons in the tongue than in any other part of the body.

Did you know?

More than 50% of American adults have oral herpes, which is commonly known as "cold sores" or "fever blisters." The herpes virus can be active on the skin surface without showing any signs or causing any symptoms.

Did you know?

Illicit drug use costs the United States approximately $181 billion every year.

Relative Energy Consumption per Person for Selected Countries Relative Energy Consumption per Person for Selected Countries
Cultural Variations in the Strange Situation Across cultures, most toddlers exhibit secure attachme Cultural Variations in the Strange Situation Across cultures, most toddlers exhibit secure attachme
This photograph of a Union soldier just freed from Andersonville prison, stunned and enraged norther This photograph of a Union soldier just freed from Andersonville prison, stunned and enraged norther
Every culture has funeral rituals that help its members mark the passing of one of their own and ... Every culture has funeral rituals that help its members mark the passing of one of their own and ...
Capital’s Share of Income in a Cross-Section of Countries Capital’s Share of Income in a Cross-Section of Countries
Map of Arabic Speaking Countries Map of Arabic Speaking Countries
Video: Major Elements in Biological Molecules: Proteins

For a complete list of videos, visit our video library