Author Question: In practice, under the EMS, a member country A) could never change its interest rate. B) could ... (Read 74 times)

fbq8i · **on:** Jun 30, 2018

In practice, under the EMS, a member country

A) could never change its interest rate.
B) could change its interest rate only if other countries changed theirs as well.
C) must apply to a special European Commission in order to change its interest rate.
D) had complete freedom in choosing the interest rate it wanted.
E) had complete freedom in choosing its interest rate only if it is a very small country.

Question 2

First, what are the primary determinants of output per worker? And second, to what extent can each cause a permanent change in economic growth?

What will be an ideal response?

Briannahope · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

B

Answer to Question 2

The two primary determinants of growth are capital accumulation and technological progress. Capital changes when there are changes in investment and, therefore, the saving rate. Because the saving rate cannot increase forever, capital accumulation cannot cause permanent changes in economic growth. Technological progress, on the other hand, can result in permanent changes in economic growth.