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Author Question: Why is the economy at full employment in the long run? A) Only wages have the ability to adjust. ... (Read 66 times)

Beheh

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on: Jun 30, 2018
Why is the economy at full employment in the long run?
 
  A) Only wages have the ability to adjust.
  B) Only price can adjust.
  C) Prices don't adjust.
  D) Wages and the price level eventually adjust to full employment equilibrium levels.
  E) Government policies eventually converge on the full employment strategy.

Question 2

The case of New Zealand, described in the text, draws what technical conclusion regarding the country's international debt position?
 
  What will be an ideal response?


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pallen55

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Reply #1 on: Jun 30, 2018
Answer to Question 1

D

Answer to Question 2

Fundamentally, the question is whether or not a country can sustain a current account deficit indefinitely. The conclusion depends upon the country's future prospects. If net exports are expected to rise at a rate sufficient to counteract the effects of debt (including interest payments) over the relevant time period, than deficits could go on for an extended period.


Beheh

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Reply 2 on: Jun 30, 2018
Great answer, keep it coming :)

6ana001

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Reply 3 on: Yesterday
Excellent

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