Exhibit 6-1 Business cycle
In Exhibit 6-1, the recession phase of the business cycle can be represented by point(s):
A. CDE.
B. BCD.
C. EFG.
D. A and E.
Answer: A
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The least liquid form of money is _________
Fill in the blank(s) with the appropriate word(s).
The entire sequence of a decline in aggregate economic activity followed by recovery, measured from peak to peak or trough to trough is a
A) long-run trend. B) potential output path. C) business cycle. D) recurrent comovement.
As a group, U.S. consumers have no income response for their consumption of ice cream so that the income elasticity of demand for ice cream equals zero
Does this mean that the change in ice cream consumption that results from a price increase is entirely composed of the substitution effect? A) Yes, the income effect associated with a price change is zero B) No, any price change moves the point of consumption to a new indifference curve, so there must be a non-zero income effect C) No, the income and substitution effects in this case move in opposite directions and completely offset one another, so it only appears that the income effect is zero D) We need more information about the goods to answer this question
Under a floating rate system, exchange rates are determined by supply and demand in the foreign exchange market without government intervention
a. True b. False