What are the leading economic indicators supposed to predict?
(A) Business cycles
(B) Nonmarket activities
(C) Consumer expectations
(D) Stagflation
Ans: (A) Business cycle
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One important consequence of the public debt in the United States is that:
A. incentives to work are increased. B. it transfers a portion of real output to foreign nations. C. there is greater saving at every level of disposable income. D. income inequality is reduced.
Which of the following conditions can help prolong the life of a cartel?
A) There are only a few firms in the market and they all belong to the cartel. B) There are many firms in the market that are not members of the cartel. C) It is difficult to know what price any cartel member is actually charging. D) The cartel has no ability to punish members who cheat on the cartel.
Refer to the data provided in Table 10.1 below to answer the following question(s).
Table 10.1 
Refer to Table 10.1. If the payment to labor per day is $100, this T-shirt manufacturer is maximizing profits if he will hire ________ employee(s).
A. one B. two C. four D. five
Firms have inventories that they can draw down to meet an increase in demand. This will
A. increase the size of the multiplier, because firms will be able to respond more quickly to a change in demand. B. decrease the size of the multiplier, because output will not immediately respond to changes in demand. C. have no effect on the multiplier, because the MPC remains unchanged. D. either increase or decrease the multiplier, depending on the size of the MPC.