« previous next »

Author Question: Why do countries who are members of a currency union have difficulty in recovering from a recession? ... (Read 50 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 1885, the Lloyd Manufacturing Company of Albany, New York, promoted and sold "Cocaine Toothache Drops" at 15 cents per bottle! In 1914, the Harrison Narcotic Act brought the sale and distribution of this drug under federal control.

Did you know?

The first documented use of surgical anesthesia in the United States was in Connecticut in 1844.

Did you know?

Though methadone is often used to treat dependency on other opioids, the drug itself can be abused. Crushing or snorting methadone can achieve the opiate "rush" desired by addicts. Improper use such as these can lead to a dangerous dependency on methadone. This drug now accounts for nearly one-third of opioid-related deaths.

Did you know?

Once thought to have neurofibromatosis, Joseph Merrick (also known as "the elephant man") is now, in retrospect, thought by clinical experts to have had Proteus syndrome. This endocrine disease causes continued and abnormal growth of the bones, muscles, skin, and so on and can become completely debilitating with severe deformities occurring anywhere on the body.

Did you know?

Cocaine was isolated in 1860 and first used as a local anesthetic in 1884. Its first clinical use was by Sigmund Freud to wean a patient from morphine addiction. The fictional character Sherlock Holmes was supposed to be addicted to cocaine by injection.

Various members of the Sciuridae family Various members of the Sciuridae family
The declining age of menarche over the past 150 years has been measured in many European countries, The declining age of menarche over the past 150 years has been measured in many European countries,
In 2008, the U.S. economy suffered a gaping wound as several trillion dollars were ripped out of it. In 2008, the U.S. economy suffered a gaping wound as several trillion dollars were ripped out of it.
Countries of Origin of Asian Americans Countries of Origin of Asian Americans
For centuries, widows in the Mediterranean countries, such as thise widow in Greece, were expected ... For centuries, widows in the Mediterranean countries, such as thise widow in Greece, were expected ...
Healthy Eating around the World Many countries Healthy Eating around the World Many countries
Video: Kinetic parameters & Kinetic experiment

For a complete list of videos, visit our video library