Research on the effects of recessions on the real level of GDP shows that
A) recessions cause only temporary reductions in real GDP, which are offset by growth during the expansion phase.
B) recessions cause large, permanent reductions in the real level of GDP.
C) recessions cause both temporary and permanent declines in real GDP, but most of the decline is temporary.
D) recessions cause both temporary and permanent declines in real GDP, but most of the decline is permanent.
C
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Ben quit his job as an economics professor to become a golf professional. He gave up his salary ($40,000 . and invested his retirement fund of $50,000 (which was earning 10 percent interest) in this venture. After all expenses, his net winnings (profit) were $45,000 . Ben's economic profits were
a. $45,000. b. $5,000. c. $2,000. d. zero.
When looking at this graph for the welfare effects of a subsidy, which area represents the cost of the subsidy to the government?
a. area a + b + c + d
b. area b + e + f + c + g
c. area f
d. area a + b – c
The United States' basic economic problem would be solved if
A. everyone were given $500,000. B. the population stopped growing. C. all sickness and disease were wiped out. D. our wants could be satisfied with available resources.
You sell your good in a perfectly competitive market where the market price is $7.00. When you sell 100 units your total revenue is $700. When you sell 101 units:
A. total revenue increases by less than $7. B. total revenue increases by exactly $7. C. total revenue increases by more than $7. D. total revenue may increase or decrease.