Attempts to Keep the Economy Always Within a Hair's Breadth

question 205

Multiple Choice

Attempts to keep the economy always within a hair's breadth of full employment is called

• A)shock absorption.
• B)lagging.
• C)fine tuning.
• D)crowding out.

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Definitions:

New York Stock Exchange

One of the largest stock exchanges in the world, located in New York City, where stocks are bought and sold.

Relative Purchasing Power Parity

An economic theory that states the rate of exchange between two currencies will adjust to reflect changes in the price levels of the two countries.

Absolute Exchange Rate

An exchange rate that directly compares the purchasing power of two different currencies.

Inflation Rates

The rate at which the general level of prices for goods and services is rising, concurrently eroding purchasing power, usually expressed as a percentage.