The following statements about the business cycle are correct except ______
A. it is a regular predictable cycle in real GDP around potential GDP
B. from the peak to the trough, the economy is in a recession
C. from the trough to the peak, the economy is in an expansion
D. it is a periodic movement in economic activity including employment
A The business cycle fluctuations around potential GDP are ir-regular and difficult to predict.
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A dieter who prefers to eat small portions at his next meal, but chooses a large portion at mealtime when it arrives is:
A. dynamically consistent. B. dynamically inconsistent. C. exhibiting self-control. D. exhibiting a past bias.
The rule for the optimal use of any input states that
a. when MRP is less than price, profit will increase when more of that resource is utilized. b. when MRP is greater than resource price, profit will increase when more of that resource is utilized. c. when MRP equals price, profit will increase when less of that resource is utilized. d. when MRP is greater than resource price, profit will increase when less of that resource is utilized. e. resources should be used only if MRP exceeds product price.
The economy is currently on its production possibilities frontier (PPF). A politician says that it is possible to get more of everything---more infrastructure, more schools, more national defense, more spending on social programs, and so on. The politician is
What will be an ideal response?
Which of the following describes the national security argument for protectionism?
A) Nearly all industries can make some claim to strategic importance so such trade restrictions can get out of hand. B) Increases in economic surplus outweigh the decreases in consumer surplus that result from protectionism. C) Some goods should be insulated from foreign competition to ensure an adequate supply of these goods in the event of an international conflict. D) Private companies (for example, Coca-Cola) should not be forced to reveal their trade secrets to foreign companies.