Which of the following is TRUE regarding business cycles?
I. Cycles are predictable.
II. In each cycle, a peak follows an expansion.
III. Potential GDP fluctuates around real GDP.
A) I and II
B) I and III
C) II and III
D) II only
D
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Suppose that the price of a jar of peanut butter is $5 and the price of a jar of jelly is $3. What is the relative price of a jar of peanut butter?
A) 2.400 B) 0.417 C) 0.250 D) 1.667
Explain why large interest rate differences would be strong evidence of unrealized gains from trade
What will be an ideal response?
Unemployment is good from a social point of view because
A) it keeps wages in check. B) it allows for better matches between workers and firms. C) it provides free time. D) it keeps the least efficient workers out.
In a call options contract, the
A) seller has the obligation to deliver the instrument at a specified time. B) buyer has the obligation to receive the instrument at a specified time. C) seller may choose whether or not to deliver the instrument at a specified time. D) buyer will choose to exercise his option only if the value of the underlying security falls.