The distinguishing characteristics of business cycles are
a. periods of inflation followed by periods of deflation.
b. high rates of economic growth coupled with high rates of unemployment.
c. a constant rate of economic growth coupled with ups and downs in the general level of prices.
d. periods of growth in real output followed by periods of decline.
D
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Assuming that the central bank is following a money stock targeted, an exogenous rise in investment demand
a. causes income to rise but the money stock has to be increased to accommodate the expansion. b. has to be accommodated with open market purchases to expand the money stock. c. increases income, money demand, and lowers the interest rate. d. increases income and money demand and lowers the interest rate. e. none of the above.
Accounting profits are typically
A) greater than economic profits because accounting profits do not include explicit costs. B) greater than economic profits because accounting profits do not include implicit costs. C) smaller than economic profits because accounting profits do not include explicit costs. D) equal to economic profits in the long run.
Ultimately, trade agreements are necessary because
A. farmers need to be assured of access to foreign markets. B. exports make everyone worse off. C. tariff reduction can be politically popular within many countries. D. tariff reduction can be politically unpopular within many countries.
Smith drives his car numerous places. Sometimes he drives his car around his residential neighborhood and sometimes he drives it on the highway. Occasionally, Smith gets peeved with the way other people drive and makes a rude gesture to them. Based on one of the theories discussed in the textbook, he is
A) more likely to make a rude gesture to another driver on the highway than in his residential neighborhood. B) less likely to make a rude gesture to another driver on the highway than in his residential neighborhood. C) equally likely to make a rude gesture to another driver on the highway as in the residential neighborhood. D) There is not enough information provided to answer this question.