In a business cycle, the end of an expansion is represented by
A. an inflation.
B. a trough.
C. a peak.
D. a depression.
Answer: C
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Which of the following refers to a shift in government spending from the country's infrastructure to education and health care?
a. Capital shallowing b. Expropriation c. Liberalization d. Investment diversion e. Import substitution
Increases in investment spending cause interest rates to increase. As a result,
a. households will demand more loanable funds b. households will save a smaller fraction of their incomes c. households will voluntarily decrease their consumption spending d. the investment curve will shift leftward e. firm will receive greater profits from households who are consuming goods
A minimum wage that is set below the equilibrium wage will
a. cause increased unemployment b. have no effect on employment c. cause the overall wage to increase d. cause the overall wage to decrease e. create more jobs
When firms are faced with making strategic choices to maximize profit, economists typically use
a. the theory of monopoly to model their behavior. b. the theory of aggressive competition to model their behavior. c. game theory to model their behavior. d. cartel theory to model their behavior.