From the classical perspective, a decrease in output during a recession is a result of
A) firms voluntarily supplying fewer goods and services in the marketplace.
B) a greater quantity of goods and services supplied than is the quantity demanded for these goods and services.
C) the decrease in the overall level of production due to those firms which were forced to shut down.
D) the decline in availability of factors of production which naturally occurs at the onset of a recession.
A
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The multiplier that arises from equal increases in government spending and taxes is called the
A) balanced budget multiplier. B) simple multiplier. C) tax multiplier. D) government spending multiplier.
When sketched as a function of disposable income, the investment demand curve is:
a. always horizontal. b. always vertical. c. upward sloping. d. parabolic.
When the government creates a monopoly, the social loss may include
a. declining marginal costs. b. the cost of lawyers and lobbyists hired to convince lawmakers to continue the monopoly. c. excessive monopoly profits. d. diminishing marginal revenue.
In a market economy, the amount of goods and services someone can get depends upon ______.
a. government rules b. social class c. income d. need