var imagesSmall = ",,,"; var imagesLarge = "krugmanwellsecon4-numbered_fig-ch21_fig_1,,krugmanwellsecon4-numbered_fig-ch21_fig_4,krugmanwellsecon4-numbered_fig-ch21_fig_5,krugmanwellsecon4-numbered_fig-ch21_fig_7,krugmanwellsecon4-numbered_fig-ch21_fig_8,,,"; var imagesXlarge = "krugmanwellsecon4-unnumbered_fig-ch21_un_01,krugmanwellsecon4-numbered_fig-ch21_fig_2,krugmanwellsecon4-numbered_fig-ch21_fig_6,,,"; /*** CYU answers ***/ xBookUtils.showAnswers['krugmanwellsecon4-cyu-21-1-1a'] = "
This is a microeconomic question because it addresses decisions made by consumers about a particular product.
"; xBookUtils.showAnswers['krugmanwellsecon4-cyu-21-1-1b'] = "This is a macroeconomic question because it addresses consumer spending in the overall economy.
"; xBookUtils.showAnswers['krugmanwellsecon4-cyu-21-1-1c'] = "This is a macroeconomic question because it addresses changes in the overall economy.
"; xBookUtils.showAnswers['krugmanwellsecon4-cyu-21-1-1d'] = "This is a microeconomic question because it addresses changes in a particular market, in this case the market for geologists.
"; xBookUtils.showAnswers['krugmanwellsecon4-cyu-21-1-1e'] = "This is a microeconomic question because it addresses choices made by consumers and producers about which mode of transportation to use.
"; xBookUtils.showAnswers['krugmanwellsecon4-cyu-21-1-1f'] = "This is a microeconomic question because it addresses changes in a particular market.
"; xBookUtils.showAnswers['krugmanwellsecon4-cyu-21-1-1g'] = "This is a macroeconomic question because it addresses changes in a measure of the economy’s overall price level.
"; xBookUtils.showAnswers['krugmanwellsecon4-cyu-21-1-2a'] = "When people can’t get credit to finance their purchases, they will be unable to spend money. This will weaken the economy, and as others see the economy weaken, they will also cut back on their spending in order to save for future bad times. As a result, the credit shortfall will spark a compounding effect through the economy as people cut back their spending, making the economy worse, leading to more cutbacks in spending, and so on.
"; xBookUtils.showAnswers['krugmanwellsecon4-cyu-21-1-2b'] = "If you believe the economy is self-regulating, then you would advocate doing nothing in response to the slump.
"; xBookUtils.showAnswers['krugmanwellsecon4-cyu-21-1-2c'] = "If you believe in Keynesian economics, you would advocate that policy makers undertake monetary and fiscal policies to stimulate spending in the economy.
"; xBookUtils.showAnswers['krugmanwellsecon4-cyu-21-2-1a'] = "We talk about business cycles for the economy as a whole because recessions and expansions are not confined to a few industries—they reflect downturns and upturns for the economy as a whole. In downturns, almost every sector of the economy reduces output and the number of people employed. Moreover, business cycles are an international phenomenon, sometimes moving in rough synchrony across countries.
"; xBookUtils.showAnswers['krugmanwellsecon4-cyu-21-2-2a'] = "Recessions cause a great deal of pain across the entire society. They cause large numbers of workers to lose their jobs and make it hard to find new jobs. Recessions hurt the standard of living of many families and are usually associated with a rise in the number of people living below the poverty line, an increase in the number of people who lose their houses because they can’t afford their mortgage payments, and a fall in the percentage of Americans with health insurance. Recessions also hurt the profits of firms.
"; xBookUtils.showAnswers['krugmanwellsecon4-cyu-21-3-1a'] = "Countries with high rates of population growth will have to maintain higher growth rates of overall output than countries with low rates of population growth in order to achieve an increased standard of living per person because aggregate output will have to be divided among a larger number of people.
"; xBookUtils.showAnswers['krugmanwellsecon4-cyu-21-3-2a'] = "No, Argentina is not poorer than it was in the past. Both Argentina and Canada have experienced long-run growth. However, after World War II, Argentina did not make as much progress as Canada, perhaps because of political instability and bad macroeconomic policies. Canada’s economy grew much faster than Argentina’s. Although Canada is now about three times as rich as Argentina, Argentina still had long-run growth of its economy.
"; xBookUtils.showAnswers['krugmanwellsecon4-cyu-21-4-1a'] = "As some prices have risen but other prices have fallen, there may be overall inflation or deflation. The answer is ambiguous.
"; xBookUtils.showAnswers['krugmanwellsecon4-cyu-21-4-1b'] = "As all prices have risen significantly, this sounds like inflation.
"; xBookUtils.showAnswers['krugmanwellsecon4-cyu-21-4-1c'] = "As most prices have fallen and others have not changed, this sounds like deflation.
"; xBookUtils.showAnswers['krugmanwellsecon4-cyu-21-5-1a'] = "This situation reflects comparative advantage. Canada’s comparative advantage results from the development of oil—Canada now has an abundance of oil.
"; xBookUtils.showAnswers['krugmanwellsecon4-cyu-21-5-1b'] = "This situation reflects comparative advantage. China’s comparative advantage results from an abundance of labor; China is good at labor-intensive activities such as assembly.
"; xBookUtils.showAnswers['krugmanwellsecon4-cyu-21-5-1c'] = "This situation reflects macroeconomic forces. Germany has been running a huge trade surplus because of underlying decisions regarding savings and investment spending with its savings in excess of its investment spending.
"; xBookUtils.showAnswers['krugmanwellsecon4-cyu-21-5-1d'] = "This situation reflects macroeconomic forces. The United States was able to begin running a large trade deficit because the technology boom made the United States an attractive place to invest, with investment spending outstripping U.S. savings.
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