If two countries A and B are member of a currency union and there is a shift in consumer preferences away from the goods of country A and towards those of country B than which one of the following would help to offset the effect of the resulting changes in aggregate demand in A and B on inflation and unemployment in the tow countries ?

Related Mcqs:

1. If the economy is at the peak of the business cycle, aggregate demand ____ unemployment _______ inflation _______ and the current account of the balance of payments is likely to move towards _______?

   A. rise; falls; rise; deficit
   B. falls; rises; falls; surplus
   C. falls; falls; falls; surplus
   D. is static; low; rises; deficit

2. If the economy is in the though phase of the business cycle, aggregate demand ____ unemployment ______ inflation ______ and the current account of the balance of payments is likely to move towards ________?

   A. falls; falls; falls; surplus
   B. falls; rises; falls; surplus
   C. is static; low; rises; deficit
   D. rises; falls; rises; deficit

3. If the economy is in the expansionary phase of the business cycle, aggregate demand ____ unemployment ____ inflation ____ payments is likely to move towards ____?

   A. falls; rise; falls; surplus
   B. is static; low; rise; deficit;
   C. falls; falls; falls; surplus
   D. rise; falls; rises; deficit

4. If the economy is in the recessionary phase of the business cycle, aggregate demand ___ unemployment ____ inflation ___ and the current account of the balance of payments is likely to move towards ____?

   A. falls; falls; falls; surplus
   B. is static; low; rises; deficit
   C. falls; rises; falls; surplus
   D. rises; falls; rises; deficit

5. The Phillips curve is an extension of the model of aggregate supply and aggregate demand because, in the short run, an increase in aggregate demand increase price and ?

   A. decreases unemployment
   B. decrease growth
   C. increases unemployment
   D. decreases inflation

6. Unemployment resulting from changes in the pattern of demand or supply in the economy is called _______ unemployment?

   A. regional
   B. technological
   C. structural
   D. demand-deficient

7. Suppose two economists are arguing about policies that deal with unemployment. One economist says. The government could lower unemployment by one percentage point if it would just increase government spending by 50 billion dollars the other economist responds Nonsense and poppycock! If the government spent an additional 50 billion dollars it would reduce unemployment by only one tenth of one percent. and that effect would only be temporary! These economists ?

   A. None of these answers
   B. Disagree because they have different scientific judgments
   C. really don’t disagree at all. It just appears that they disagree
   D. disagree because they have different values

8. In the model of aggregate demand and aggregate supply, the initial impact of an increase in consumer optimism is to ?

   A. shift the short-run aggregate supply curve to the left
   B. shift the aggregate demand curve to the right
   C. shift the short-run aggregate supply curve to the right
   D. shift the aggregate demand curve to the left

9. An increase in aggregate demand is more likely to lead to demand pull inflation if ?

   A. Aggregate supply is perfectly elastic
   B. Aggregate supply is Perfectly inelastic
   C. Aggregate supply is unit elastic
   D. Aggregate supply is relatively elastic

10. The effect of inflation on the price competitiveness of a country’s products may be offset by ?

    A. An appreciation of the currency
    B. A revaluation of the currency
    C. A depreciation of the currency
    D. Lower inflation abroad