An example of an exogenous business cycle theory would be the __________ theory.
A. innovation
B. inventory
C. monetary
D. demand shock
D. demand shock
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The early Phillips curve showed a trade-off between unemployment and inflation because it was drawn for a period in which the main source of instability was aggregate demand
a. True b. False Indicate whether the statement is true or false
Which of the following demonstrates opportunity cost?
A. With a new strain of wheat, the wheat crop of Canada grows by 20% with no change in the productive resources devoted to wheat farming. B. A tax cut increases people's purchases of consumer goods and decreases state expenditures on education. C. The ravages of World War II reduced Japan's ability to produce goods. D. Flora gets a 10% raise and increases her expenditures on movies.
One of the timing problems with fiscal policy is an "operational lag" that occurs between the:
A. time the need for fiscal action is recognized and the time that action is actually taken. B. beginning of a recession and the time that it is recognized that the event is occurring. C. time that fiscal action has an impact on output, employment, and the price level and the time by which it can be determined if the policy is effective. D. time that fiscal action is taken and the time that action has an impact on output, employment, and the price level.
Assuming a market interest rate of 6 percent per year, what is the present value of $5,000 payable at the end of three years?
A) $4,717 B) $4,450 C) $4,198 D) $4,317