In which of the following situations is the percentage change in real GDP always positive?
A. Inflation.
B. Growth recession.
C. Depression.
D. Recession.
Answer: B
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Explain how the invisible hand delivers an efficient market outcome
What will be an ideal response?
The First Theorem of Welfare Economics can be expressed as
A) the competitive equilibrium results only when no transactions costs exist. B) the competitive equilibrium does not involve reallocation of endowments. C) any efficient allocations can be achieved by competition. D) the competitive equilibrium is efficient.
Statistical studies in the United States have reached the conclusion that for most workers the response of labor supply to wage changes is
A. quite strong. B. not very strong. C. inverted. D. always zero.
Which part of real GDP fluctuates most over the course of the business cycle?
a. consumption expenditures b. government expenditures c. investment expenditures d. net exports