Which of the following is a leading indicator for economic? growth?
A) Duration of unemployment claims.
B) Industrial production.
C) S&P 500 index.
D) Gross domestic product.
Answer: C) S&P 500 index.
Broad stock market indices are generally leading indicators. GDP and industrial production are coincident indicators, and the duration of unemployment claims is a lagging indicator.
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The domestic opportunity cost of producing 100 barrels of chemicals in Germany is 1 ton of steel. In France, the domestic opportunity cost of producing 100 barrels of chemicals is 2 tons of steel. In this case
A. Germany has an absolute advantage in the production of chemicals. B. France has an absolute advantage in the production of chemicals. C. France has a comparative advantage in the production of chemicals. D. Germany has a comparative advantage in the production of chemicals.
Suppose that a new bond rating service is established that specializes in rating municipal bonds that had not previously been rated. The likely result would be
A) a shift to the left in the demand curve for municipal bonds. B) a shift to the left in the supply curve for municipal bonds. C) an increase in the equilibrium interest rate. D) a decrease in the equilibrium interest rate.
The practice of imposing import restrictions to protect a newly developing domestic economy typically results in:
a. a rapid improvement in the standard of living. b. expanded trade relations with other nations. c. lower prices of domestic products. d. allocation of resources away from the primary products. e. greater cost efficiency in domestic production.
Suppose the minimum average total cost (ATC) of a firm competing in a competitive price-taker market was $1.00 per unit and that the firm's minimum average variable cost (AVC) was $.80 per unit. If the market price was $.75 per unit, a profit-seeking firm would
a. shut down immediately. b. produce where MR = MC in the short run. c. shut down in the long run but remain in business in the short run. d. do both b and c.