Financial Crises Tend to Have Common Underlying Macroeconomic Causes: Low

question 139

True/False

Financial crises tend to have common underlying macroeconomic causes: low relative price inflation rates,a narrowing current account deficit,and an excessive expansion of domestic borrowing.

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Definitions:

Inelastic

A characteristic of goods whereby a change in price leads to a relatively smaller change in the quantity demanded or supplied.

Total-revenue Test

A method used to determine the price elasticity of demand by observing changes in total revenue as a result of price alterations.

Demand

The volume of a commodity or service that buyers intend and can afford to buy across a range of prices over a set time frame.