A decline in business activity is called
A. a trough.
B. a peak.
C. an expansion.
D. a recession.
Answer: D
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A major difference between the transactions demand for money and the precautionary demand is that the
A) transactions demand is for emergencies while the precautionary demand is for every day expenditures. B) transactions demand involves expected expenditures while the precautionary demand involves unexpected expenditures. C) transactions demand means that people are foregoing interest but they are not foregoing interest in the precautionary demand. D) transactions demand leads to the purchase of assets while the precautionary demand does not.
In an economy open to international trade where the interest rate at which saving and investment would be equal is ________ the world real interest rate ________
A) above; a trade surplus ensues B) below; a trade deficit ensues C) above; there is a net capital outflow D) below; there is a net capital inflow E) none of the above
Economics studies how decision makers use scarce resources to satisfy unlimited wants
a. True b. False
Whenever a decrease in output leads to an increase in profit, the
a. marginal revenue curve lies above the marginal cost curve b. total cost curve intersects the total revenue curve c. marginal cost curve is parallel to the marginal revenue curve d. marginal cost curve lies above the marginal revenue curve e. total cost curve lies above the total revenue curve