What is a recession?
What will be an ideal response?
A recession is a period of time during which real GDP decreases, so that the growth rate of real GDP is negative, for at least two successive quarters. A recession occurs starts after a peak in the business cycle and ends before a trough in the business cycle. During a recession, real GDP falls below potential GDP.
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After 1995 U.S. growth rate ________ and the European Rate ________
A) slowed down; speeded up B) speeded up; slowed down C) slowed down; slowed down D) speeded up, speeded up
An income tax _____
a. increases the return to bearing risk, if the company is a monopolist b. has no impact on the return to bearing risk c. increases the return to bearing risk d. reduces the return to bearing risk
Steak is a normal good. If the price of steak increases,
a. the income effect on the demand for steak will reinforce the substitution effect b. the income effect on the supply of steak will, to some extent, offset the substitution effect c. the budget line will rotate outward d. consumers' purchasing power will increase e. the budget line will shift outward
In the supply-and-demand diagram of the market for peanut butter, the equilibrium point has moved down and to the right. What could have caused this?
A) a fall in the price of peanuts B) a rise in the price of peanuts C) a rise in income, assuming that peanut butter is an inferior good D) a shift in preferences toward peanut butter