Economists Who Are Skeptical of Hysteresis in Europe During the 1980s

question 7

Multiple Choice

Economists who are skeptical of hysteresis in Europe during the 1980s and 1990s cite all of the following as reasons for persistently high unemployment in Europe EXCEPT

• A) generous unemployment benefits.
• B) restrictions on firms' ability to hire and fire workers.
• C) the existence of an ongoing recession.
• D) high tax rates.

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Definitions:

Home Bias

The tendency for investors to prefer investing in domestic over foreign markets, often leading to a lack of diversification in their portfolios.

Overweight Investments

An investment strategy where an investor or portfolio holds a larger percentage of a particular security or sector than the benchmark.

Preferential Treatment

Special privileges or advantages granted to certain investors or stakeholders, often resulting in more favorable financial conditions.

Equity Market Share

A measure of a company's size relative to the industry or market sector in terms of its share of total equity investments.