Peaks and troughs of the business cycle are known collectively as
A) volatility.
B) turning points.
C) equilibrium points.
D) real business cycle events.
B
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Which of the following is NOT included in the M1 measure of money?
A) currency held outside banks B) currency held in bank vaults C) checking deposits at commercial banks D) checking deposits at credit unions
If a firm's long-run average total curve shows that it can produce 5,000 DVDs at an average cost of $2.00 and 15,000 DVDs at an average cost of $1.50, this is evidence of
A) economies of scale. B) the law of supply. C) diminishing returns. D) diseconomies of scale.
Personal income taxes are reduced as part of an expansionary fiscal policy. What is the impact on aggregate expenditures and income?
A) Both increase. B) Both decrease. C) Aggregate expenditure increases and income decreases. D) Aggregate expenditure decreases and income increases.
The banking system can lend the sum of its excess reserves because
A. The money multiplier is less than 1. B. Banks are required to keep only a fraction of deposits on reserve. C. Required reserves are a leakage from the banking system. D. Bank assets are greater than bank liabilities.