Business cycles in the United States
A) tend to occur at regular intervals and are periodic.
B) tend to recur at irregular intervals, but are usually of the same length.
C) were quite common before World War II but have not occurred in the postwar period.
D) tend to have expansions that last longer than the recessions.
D
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The government of Economica announces that it will purchase its farmers’ surplus of milk. From this announcement, you can infer that Economica has a
A. free market for milk. B. price ceiling above the equilibrium price for milk. C. price floor above the equilibrium price for milk. D. price floor below the equilibrium price for milk.
If commercial banks are increasing their borrowing from the Fed while the Fed is selling government securities, the borrowing of the commercial banks from the Fed will tend to:
a. reinforce the contractionary open market operations policy. b. reinforce the expansionary open market operations policy. c. counteract the contractionary open market operations policy. d. counteract the expansionary open market operations policy.
The long run is a period long enough so that one of the firm's commitments ends
a. True b. False Indicate whether the statement is true or false
Contrary to behavior that would be required to eliminate output gaps, many firms in the economy:
A. adjust their prices only periodically. B. only change the amount of output they produce in the long run, not in the short run. C. intentionally set prices below equilibrium prices in order to create shortages. D. have fully-flexible prices that change constantly.