Which is the most volatile component of total spending? What four factors contribute to the volatility of this component of total spending?
What will be an ideal response?
The most volatile component of aggregate spending is investment. In fact, investment generates most of the fluctuation in employment and output that takes place over the course of a business cycle. The four factors that contribute to its volatility are the durability of capital goods, the irregularity of technological progress that generates innovation, and variability in both profits and expectations.
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The proposition that policy actions have no real effects in the short run if the policy actions are anticipated is known as
A) the policy irrelevance proposition. B) the Keynesian proposition. C) the inflation stabilization proposition. D) the unemployment stabilization proposition.
If an investor had a $100,000 long-term capital gain on a $100,000 investment from 1984 to 2010, her real rate of return was most likely
a. equal to the expected rate of inflation. b. positive. c. very near zero.. d. negative.
Jessica makes photo frames. She spends $5 on the materials for each photo frame. She can create one photo frame in an hour. She earns $10 per hour at a part-time job at the local coffee shop. She can sell a photo frame for $30 each. An economist would calculate the total profit for one photo frame to be
a. $10. b. $15. c. $20. d. $25.
A(n) _________ is defined as a significant decline in economic activity spread across the economy, lasting more than a few months.
A. economic deficit B. depression C. regressive economy D. recession