Macroeconomics
Test Preparation
Course Introduction
Macroeconomics is the branch of economics that examines the functioning and performance of an entire economy, focusing on aggregate indicators such as gross domestic product (GDP), unemployment rates, inflation, and national income. This course explores how economies grow and fluctuate over time, the impacts of government fiscal and monetary policy, and the factors influencing aggregate demand and supply. Students will learn to analyze economic trends, evaluate policy effectiveness, and understand the interdependencies between national and global economic systems. Key topics include economic growth, business cycles, inflation, unemployment, and the role of central banking in stabilizing economies.
Recommended Textbook Economics 4th Edition by R. Glenn Hubbard
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4273 Verified Questions
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Chapter 1: Economics: Foundations and Models
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Sample Questions
Q1) Economists reason that the optimal decision is to continue any activity up to the point where the
A) marginal benefit is zero.
B) marginal benefit is greater than the marginal cost.
C) marginal cost is zero.
D) marginal benefit equals the marginal cost.
Answer: D
Q2) According to census figures,between 1970 and 2007 the number of doctors who described themselves as self-employed
A) fell by more than 50 percent.
B) more than doubled.
C) has remained fairly constant.
D) fell to almost zero before rising back to its original level.
Answer: A
Q3) Refer to Table 1-2.The table above shows the sales of DVD recorders in North America.Present the information using a bar graph.
Answer: 11ea8d23_56f0_1e7b_b445_1bb5992683b1_TB4184_00
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3
Chapter
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Sample Questions
Q1) Refer to Figure 2-6.In response to changing consumer demands,GM has cut back on the production of hybrids and increased its production of gasoline-powered vehicles.This strategy is best represented by the
A) movement from F to E in Graph A.
B) movement from G to J in Graph B.
C) movement from L to K in Graph C.
D) movement from J to H in Graph B.
Answer: D
Q2) Rayburn Reed is a highly talented photographer.He has chosen to specialize in photography because of all of the following except
A) he obviously has a comparative advantage in photography.
B) his opportunity cost of pursuing another career is very low.
C) for him, this is the most lucrative way to purchase the products that he wants to consume.
D) his photographs are highly esteemed by art lovers who are willing to pay very high prices.
Answer: B
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Chapter 3: Where Prices Come From: the Interaction of
Demand and Supply
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Sample Questions
Q1) If a demand curve shifts to the right,then
A) demand has increased.
B) quantity demanded has increased.
C) demand has decreased.
D) quantity demanded has decreased.
Answer: A
Q2) Last year,the Pottery Palace supplied 8,000 ceramic pots at $40 each.This year,the company supplied the same quantity of ceramic pots at $55 each.Based on this evidence,The Pottery Palace has experienced
A) a decrease in supply.
B) an increase in supply.
C) an increase in the quantity supplied.
D) a decrease in the quantity supplied.
Answer: A
Q3) If the demand curve for a product shifts to the left and the supply curve for the product shifts to the left,the equilibrium quantity will decrease.
A)True
B)False
Answer: True
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Chapter 4: Economic Efficiency, government Price Setting, and Taxes
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Sample Questions
Q1) Economists are reluctant to state that price controls are desirable or undesirable because
A) it is impossible to evaluate the impact on quantity demanded and quantity supplied as a result of price controls.
B) whether the gains from the winners exceed the losses from the losers is not strictly an economic question.
C) sometimes price controls result in increases in economic efficiency and sometimes they result in decreases in economic efficiency.
D) economists are reluctant to conduct positive analysis of price controls.
Q2) Assume the market price for lemon grass is $4.00 per pound,but most buyers are willing to pay more than the market price.At the market price of $4.00,the quantity of lemon grass demanded is 1,500 pounds per month,and quantity demanded does not reach zero until the price reaches $30.00 per pound.Construct a graph showing this data,calculate the total consumer surplus in the market for lemon grass,and show the consumer surplus on the graph.
Q3) Shortage means the same thing as scarcity.
A)True
B)False
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Chapter 5: Externalities, environmental Policy, and Public Goods
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Sample Questions
Q1) A market failure arises when an entire sector of the economy (for example,the airline industry)collapses because of some unforeseen event.
A)True
B)False
Q2) When there is a negative externality,the competitive output is more than the economically efficient output level.
A)True
B)False
Q3) Refer to Figure 5-5.The efficient output is
A) Q<sub>1</sub>.
B) Q<sub>2</sub>.
C) Q<sub>3</sub>.
D) Q<sub>4</sub>.
Q4) Government imposed quantitative limits on the amount of pollution firms are allowed to produce is an example of
A) the Pigovian method of pollution control.
B) command and control approach to pollution reduction.
C) Coasian solution to pollution reduction.
D) a tradable emission allowance system of pollution control.
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Chapter 6: Elasticity: The Responsiveness of Demand and Supply
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Sample Questions
Q1) The price elasticity of demand for Stork ice cream is -4.Suppose you're told that following a price increase,quantity demanded fell by 10 percent.What was the percentage change in price that brought about this change in quantity demanded?
A) 40 percent
B) 25 percent
C) 2.5 percent
D) 0.4 percent
Q2) Cross-price elasticity of demand is calculated as the A) percentage change in quantity demanded divided by percentage change in price of a good.
B) percentage change in quantity demanded of one good divided by percentage change in price of a different good.
C) percentage change in quantity sold divided by percentage change in buyers' incomes.
D) percentage change in quantity supplied divided by percentage change in price of a good.
Q3) What factors would make you more sensitive or less sensitive to price when purchasing gasoline?
Q4) Explain the relationship between price elasticity of demand and total revenue.
Page 8
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Chapter 7: The Economics of Health Care
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Sample Questions
Q1) Adverse selection occurs in the market for used cars because used car buyers
A) have more information than used car sellers.
B) have less information than used car sellers.
C) have less incentive to maintain the value of their cars than new car buyers. D) tend to have more accidents than new car buyers.
Q2) A majority of people in the United States have private health insurance.
A)True B)False
Q3) What is an externality? Explain how someone receiving a meningitis vaccination is an example of an externality in the market for health care.
Q4) What is moral hazard?
Q5) A goal of market-based reforms of the health care system is to give patients an incentive to pay more attention to the prices of medical services.This would tend to ________ economic efficiency by ________ the costs of medical services A) increase; increasing B) increase; decreasing C) decrease; increasing D) decrease; decreasing
Q6) How can improvements in health increase a country's total income?
Page 9
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Chapter 8: Firms, the Stock Market, and Corporate Governance
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Sample Questions
Q1) A sole proprietorship is
A) the easiest type of business to set up.
B) the most difficult type of business to set up.
C) the most expensive type of business to set up.
D) the least profitable type of business to set up.
Q2) What must balance on a balance sheet?
A) Total assets must equal total liabilities plus equity.
B) Revenues must equal costs.
C) Retained earnings plus dividends paid must equal earnings per share.
D) All of these must balance.
Q3) A normal rate of return refers to the ________ that investors must earn on the funds they invest in a firm,expressed as a percentage of the amount invested.
A) minimum amount
B) maximum amount
C) total amount
D) profit
Q4) Explain the relationships between a corporation's shareholders,its board of directors,and its top managers.
Q5) Define a partnership.
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Chapter 9: Comparative Advantage and the Gains From International Trade
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Sample Questions
Q1) The ratio at which a country can trade its exports for imports from other countries is called
A) a trade barrier.
B) the terms of trade.
C) autarky.
D) a free trade agreement.
Q2) Whenever a buyer and a seller agree to trade,
A) the agreement is made based on absolute advantage.
B) they must have identical opportunity costs in producing their respective products.
C) one party will always be worse off.
D) both must believe they will be made better off.
Q3) An agreement negotiated by two countries that places a numerical limit on the quantity of a good that can be imported by one country from another country is called
A) a non-tariff trade barrier.
B) an export quota.
C) an import quota.
D) a voluntary export restraint.
Q4) What is autarky?
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Chapter 10: Consumer Choice and Behavioral Economics
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Sample Questions
Q1) Professor Parallax chooses two students in his economics class,Jasmine and Cassandra,to participate in the ultimatum game.He chooses Jasmine to be the allocator and Cassandra to be the recipient.He gives Jasmine $50 and as the allocator,she gets to decide how to split the money with Cassandra.If Cassandra decides to accept the amount allocated to her by Jasmine,both students get to keep the money.If Cassandra decides to reject her allocation,neither student gets to keep the money.How much will each student end up with if each student acts as if fairness is important? How much will each student end up with if only Cassandra acts as if fairness is important? How much will each student end up with if neither student cares about fairness?
Q2) Refer to Figure 10-4.Which of the following statements is true?
A) The consumer gets more utility from bundle r than from bundle v.
B) The consumer gets less utility from bundle w than from bundle v.
C) Bundles r, s, t and u all cost the same.
D) Bundles r and w are not affordable.
Q3) The substitution effect of a price increase causes a decrease in the quantity demanded of an inferior good.
A)True
B)False
Q4) What is a Giffen good?
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Chapter 11: Technology, production, and Costs
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Sample Questions
Q1) Refer to Table 11-1.Diminishing marginal returns sets in when the ________ worker is hired.
A) 2nd
B) 3rd
C) 4th
D) None of the above; the production function displays increasing marginal returns.
Q2) Higher isocost lines correspond to higher
A) profits.
B) total costs of production.
C) input prices.
D) sales revenue.
Q3) An isoquant shows
A) the combinations of two goods that yield the same total satisfaction.
B) the combinations of two inputs that yield the same total product.
C) the combinations of two inputs that cost the same total quantity of money.
D) the combination of two goods that cost the same amount of money.
Q4) As output increases,average fixed cost gets smaller and smaller.
A)True
B)False
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Chapter 12: Firms in Perfectly Competitive Markets
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Sample Questions
Q1) Refer to Table 12-1.If the market price of each camera case is $8,what is the profit-maximizing quantity?
A) 300 units
B) 400 units
C) 500 units
D) 600 units
Q2) Refer to Figure 12-6.At price P<sub>1</sub>,the firm would
A) lose an amount equal to its fixed cost.
B) lose an amount more than fixed cost.
C) lose an amount less than fixed cost.
D) break even.
Q3) Which of the following describes a situation in which a good or service is produced at the lowest possible cost?
A) productive efficiency
B) allocative efficiency
C) marginal efficiency
D) profit maximization
Q4) In an increasing-cost industry the long-run supply curve is upward sloping.
A)True
B)False
Page 14
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Chapter 13: Monopolistic Competition: The Competitive
Model in a More Realistic Setting
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Sample Questions
Q1) Refer to Table 13-2.What is the output (Q)that maximizes profit and what is the price (P)charged?
A) P=$55; Q=5 cases
B) P=$50; Q=6 cases
C) P=$45; Q=7 cases
D) P=$40; Q=8 cases
Q2) Unlike a perfectly competitive firm,for a monopolistically competitive firm
A) price marginal cost for all output levels.
B) price marginal revenue for all output levels.
C) price average revenue for all output levels.
D) marginal revenue = marginal cost at the profit-maximizing output.
Q3) What is the difference between the terms "marketing" and "advertising"?
Q4) Refer to Table 13-1.The Table shows
A) an elastic segment of the demand curve.
B) an inelastic segment of the demand curve.
C) a demand curve with an elastic segment of the demand curve from $7.50 to $6.50 followed by an inelastic segment.
D) a demand curve with an inelastic segment of the demand curve from $7.50 to $6.50 followed by an elastic segment.
Page 15
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Chapter 14: Oligopoly: Firms in Less Competitive Markets
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Sample Questions
Q1) Which of the following is an example of a way in which a firm in oligopoly can escape the prisoner's dilemma?
A) producing more of its product
B) advertising that it will match its rival's price
C) reneging on a previous tacit agreement with rival firms to charge identical high prices
D) ignoring the pricing decisions of the other firms
Q2) Refer to Figure 14-1.Should Lexus lower its price in order to deter BMW's entry into the luxury hybrid automobile market?
A) In terms of profit earned, it makes no difference whether Lexus lowers its price or not; in either case it will make $280 million profit if BMW enters.
B) No, it should keep the same price and work to capitalize on its brand loyalty.
C) Yes, it will drive BMW out of the market.
D) No, because BMW will enter the market regardless of Lexus' decision about its price.
Q3) Explain the difference between a cooperative equilibrium and a noncooperative equilibrium in game theory.
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Chapter 15: Monopoly and Antitrust Policy
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Sample Questions
Q1) If a monopolist's price is $50 per unit and its marginal cost is $25,then
A) to maximize profit the firm should increase output.
B) to maximize profit the firm should decrease output.
C) to maximize profit the firm should continue to produce the output it is producing.
D) Not enough information is given to say what the firm should do to maximize profit.
Q2) To enter a local cable television market,a firm needs a license from the city government.This is an example of
A) a government-imposed barrier.
B) occupational licensing.
C) a natural monopoly.
D) the government maintaining consistent standards in the broadcast industry.
Q3) A vertical merger is one that takes place between two companies producing different goods or services for one specific finished product.
A)True
B)False
Q4) What gives rise to a natural monopoly? How do consumers benefit from a natural monopoly?
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Chapter 16: Pricing Strategy
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Sample Questions
Q1) A firm that can effectively price discriminate will charge a higher price to
A) customers who have the more elastic demand for the product.
B) customers who have the more inelastic demand for the product.
C) buyers who belong to the largest market segment.
D) buyers who are members of the smallest market segment.
Q2) Refer to Figure 16-2.What is the quantity sold to each group of customer and what is the total quantity sold?
A) quantity sold to students=Q<sub>b</sub>; quantity sold to non-students=Q<sub>b</sub>; total sales=Q<sub>a</sub>
B) quantity sold to students=Q<sub>c</sub>; quantity sold to non-students=Q<sub>b</sub>; total sales=Q<sub>b</sub>+Q<sub>c</sub>
C) quantity sold to students=Q<sub>c</sub>; quantity sold to non-students=Q<sub>e</sub>; total sales=Q<sub>e</sub>+Q<sub>c</sub>
D) quantity sold to students=Q<sub>c</sub>; quantity sold to non-students=Q<sub>d</sub>; total sales=Q<sub>d</sub>+Q<sub>c</sub>
Q3) What is odd pricing? Why do some merchants use odd pricing?
Q4) What is the difference between price discrimination and other forms of discrimination?
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Chapter 17: The Markets for Labor and Other Factors of Production
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Sample Questions
Q1) Which of the following statements about commission systems of compensation is false?
A) They increase the risk to workers because sometimes output declines for reasons not connected to the worker's effort.
B) During sluggish periods, an employer's payroll expenses will decline along with sales.
C) If workers are paid on the basis of the number of units produced, they may become less concerned about quality.
D) The lack of income stability will induce the more productive workers to leave in search of more secure employment.
Q2) The signaling hypothesis of education states that education is a costly activity that enhances a worker's productivity.
A)True
B)False
Q3) While labor unions tend to negotiate above-equilibrium wage rates for their members,they also tend to reduce the quantity of labor hired.
A)True
B)False
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Chapter 18: Public Choice, taxes, and the Distribution of Income
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Sample Questions
Q1) Define logrolling.Explain why logrolling often results in legislation that benefits the economic interests of a few,while harming the interests of a larger group of people.
Q2) According to public choice theory,policymakers
A) place the interests of the public above their own self-interest.
B) are likely to pursue their own self-interest, even if their self-interest conflicts with the public interest.
C) act in ways to maximize economic efficiency.
D) act in ways to bring about an equitable distribution of society's wealth.
Q3) What is the poverty rate?
A) the rate at which the number of people relative to the size of the population fall below the poverty line
B) the percentage of the population earning an annual income below the poverty line, according to the federal government's definition
C) the percentage of working adults whose annual income is sufficiently low as to be are exempt from paying income taxes
D) the percentage of households who qualify for government assistance to meet the minimal requirement for adequate nutrition
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Chapter 19: GDP: Measuring Total Production and Income
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Sample Questions
Q1) National income equals gross domestic product
A) plus sales taxes.
B) plus government transfer payments.
C) minus the consumption of fixed capital.
D) minus government transfer payments.
Q2) Increases in real GDP would overstate the increase in the well-being of a country over time if,over that time period,the
A) average hours worked per week increased.
B) amount of pollution decreased.
C) price level increased.
D) crime rate decreased.
Q3) During a business cycle expansion,total production ________ and total employment ________.
A) increases; increases
B) increases; decreases
C) decreases; increases
D) decreases; decreases
Q4) Residential investment includes spending by firms on office buildings.
A)True
B)False
Page 21
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Chapter 20: Unemployment and Inflation
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Sample Questions
Q1) Most of the unemployment that occurred during the Great Depression was
A) frictional unemployment.
B) structural unemployment.
C) cyclical unemployment.
D) core unemployment.
Q2) The cost to firms of changing prices
A) is small even when there is rapid inflation.
B) is called a menu cost.
C) does not exist if inflation is perfectly anticipated.
D) all of the above
Q3) Which of the following would be the best measure of the cost of living?
A) real GDP
B) real GDP per person
C) GDP deflator
D) consumer price index
Q4) In the United States,the typical person who has lost his or her job finds another one in a few months except during severe recessions.
A)True
B)False
Q5) Describe how inflation can be costly even if it is anticipated.
Page 22
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Chapter 21: Economic Growth, the Financial System, and Business Cycles
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Sample Questions
Q1) Use the equations for public and private saving to demonstrate how total saving in the economy equals investment.
Q2) Increases in real GDP since 1900 can actually underestimate growth in the standard of living for Americans since 1900 because
A) the level of pollution in 1900 was much higher than it is today.
B) the crime rate was higher in 1900 than it is today.
C) goods and services are more expensive today as compared to 1900.
D) the quality of health care that exists today was not available in 1900.
Q3) Increasing the amount of consumption spending and reducing the amount of savings ________ investment expenditures,and ________ long-run economic growth in the economy.
A) increases; increases
B) increases; decreases
C) decreases; increases
D) decreases; decreases
Q4) Explain and show graphically how government deficits can "crowd out" private investment.
Q5) What factors increase potential GDP? Include a definition of potential GDP in your answer.
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Chapter 22: Long-Run Economic Growth: Sources and Policies
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Sample Questions
Q1) Knowledge capital is
A) rival.
B) nonrival.
C) nonexcludable.
D) both B and C
Q2) Increasing the growth rate of GDP per capita and sustaining this growth rate in an economy can
A) increase infant mortality.
B) increase standards of living.
C) increase the level of poverty.
D) lower life expectancy.
Q3) Countries that are more globalized tend to have
A) lower levels of real GDP per capita.
B) a higher likelihood of war or revolution.
C) higher growth rates in real GDP per capita.
D) lower levels of foreign direct investment.
Q4) The developing countries have been catching up to the lower-income industrial countries in terms of economic growth.
A)True
B)False
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Chapter 23: Aggregate Expenditure and Output in the Short Run
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Sample Questions
Q1) Why do economists care about aggregate expenditures?
Q2) Refer to Figure 23-1.According to the figure above,at what point is aggregate expenditure greater than GDP?
A) J
B) K
C) L
D) none of the above
Q3) ________ is defined as the value of a household's assets minus the value of its liabilities.
A) Household income
B) Household wealth
C) Personal household consumption
D) Planned household investment
Q4) If the consumption function is defined as C = 7,250 + 0.8Y,what is the marginal propensity to save?
A) 0.2
B) 0.8
C) 5.8
D) 9.1
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Q5) What is the difference between aggregate expenditure and consumption spending?
Chapter 24: Aggregate Demand and Aggregate Supply Analysis
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Q1) Monetarists believe that the quantity of money should be increased at an increasing rate.
A)True
B)False
Q2) Which of the following is one explanation as to why the aggregate demand curve slopes downward?
A) Decreases in the price level raise the interest rate and increase consumption spending.
B) Decreases in the price level raise the interest rate and increase investment spending.
C) Decreases in the U.S. price level relative to the price level in other countries lower net exports.
D) Decreases in the price level raise real wealth and increase consumption spending.
Q3) The long-run adjustment to a negative supply shock results in
A) the short-run aggregate supply curve shifting to the right.
B) the price level rising.
C) unemployment rising.
D) workers being willing to accept higher wages.
Q4) Explain why the long-run aggregate supply curve is vertical.
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Chapter 25: Money, banks, and the Federal Reserve System
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Sample Questions
Q1) The largest liability on the balance sheet of most banks is its A) loans.
B) holdings of securities.
C) deposits with the Federal Reserve.
D) checking account and savings account deposits of its customers.
E) vault cash.
Q2) The purchase of Treasury securities by the Federal Reserve will,in general,
A) not change the money supply.
B) not change the quantity of reserves held by banks.
C) increase the quantity of reserves held by banks.
D) decrease the quantity of reserves held by banks.
Q3) Suppose you withdraw $1,000 in cash from your checking account.Draw a T-account to show the effect of this transaction on your bank's balance sheet.
Q4) Which of the following is not counted in M1?
A) checking account balances
B) credit card balances
C) coins in circulation
D) currency in circulation
E) traveler's check balances
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Chapter 26: Monetary Policy
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Sample Questions
Q1) With a monetary growth rule as proposed by the monetarists,during a recession the rate of growth of the money supply would
A) decrease.
B) increase.
C) not change.
D) decrease or increase depending on economic conditions.
Q2) When housing prices fell as they did beginning in 2006 following the housing market bubble,most banks and other lenders ________ the requirement for borrowers,making it ________ for potential home buyers to obtain mortgages.
A) tightened; easier
B) tightened; harder
C) eased; easier
D) eased; harder
Q3) In the countries that have adopted inflation targeting,the inflation rate has typically A) increased.
B) decreased.
C) decreased to zero.
D) not changed.
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Chapter 27: Fiscal Policy
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Sample Questions
Q1) The largest source of federal government revenue in 2010 was A) sales taxes.
B) corporate income taxes.
C) individual income taxes.
D) payroll taxes to fund Social Security and Medicare programs.
Q2) Which of the following is considered contractionary fiscal policy?
A) Congress increases the income tax rate.
B) Congress increases defense spending.
C) Legislation removes a college tuition deduction from federal income taxes.
D) The New Jersey legislature cuts highway spending to balance its budget.
Q3) Refer to Figure 27-1.Suppose the economy is in short-run equilibrium below potential GDP and Congress and the president lower taxes to move the economy back to long-run equilibrium.Using the static AD-AS model in the figure above,this would be depicted as a movement from
A) A to B.
B) B to C.
C) C to B.
D) B to A.
E) A to E.
Q4) List the five categories of federal government expenditures.
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Chapter 28: Inflation, unemployment, and Federal Reserve Policy
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Sample Questions
Q1) The long-run aggregate supply curve is ________,while the long-run Phillips curve is ________.
A) positively sloped; negatively sloped
B) vertical; negatively sloped
C) vertical; also vertical
D) positively sloped; positively sloped
Q2) A decrease in expected inflation will
A) reduce real wages.
B) increase the natural rate of unemployment.
C) shift the long-run Phillips curve to the left.
D) shift the short-run Phillips curve to the left.
Q3) If expected inflation rises,the long-run Phillips curve will
A) shift to the right.
B) not be affected.
C) shift to the left.
D) become negatively sloped.
Q4) Suppose a presidential candidate makes a statement in a debate whereby he promises that he would encourage the Fed to permanently lower the unemployment rate to 3%.His opponent claims that this type of policy idea is mired in the 1960s and would only cause inflation.Explain what the opponent means.
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Chapter 29: Macroeconomics in an Open Economy
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Sample Questions
Q1) Which of the following is not included in the balance of the financial account of the United States?
A) a purchase of Toyota stock by Ford
B) a purchase of GE stock by a firm in China
C) a purchase of U.S. car manufacturing plant by Toyota
D) a purchase of a German brewery by the U.S. company, Budweiser
E) a purchase of German financial services by Chase Manhattan bank
Q2) The recession of 2007-2009 decreased the demand for imports in Japan,which caused the ________ curve for the yen to ________,increasing the exchange rate and the value of the yen.
A) supply; right
B) supply; left
C) demand; right
D) demand; left
Q3) What two measures of macroeconomic activity are often referred to as the "twin deficits"?
A) net capital flows and net exports
B) the foreign exchange deficit and net foreign investment
C) the budget deficit and the trade balance
D) the saving-investment deficit and the export deficit
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Chapter 30: The International Financial System
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Sample Questions
Q1) Suppose Mexico and the United States are on the gold standard.If there is a half an ounce of gold in the dollar,and one quarter an ounce of gold in the peso,then the exchange rate is
A) $1 = 2 pesos.
B) $1 = 4 pesos.
C) $1 = 1/2 peso.
D) $1 = 1/4 peso.
E) $0.50 = 1/2 peso.
Q2) By 2011,how many European countries were members of the European Union?
A) 12
B) 15
C) 27
D) 57
Q3) If a country sets a pegged exchange rate that is above the equilibrium exchange rate,how can the country maintain the peg?
A) by purchasing surplus domestic currency at the pegged rate
B) by selling surplus domestic currency at the pegged rate
C) by purchasing surplus domestic currency at the equilibrium exchange rate
D) by increasing the pegged exchange rate
Q4) Why might a country raise interest rates in the face of an exchange rate crisis?
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