In the expansion phase of the business cycle
a. output is rising
b. unemployment is falling.
c. consumer and business confidence is high.
d. all of the above are true.
d
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Do automatic fiscal stabilizers eliminate business cycles?
A) Yes B) No, because they have no effect if the business cycle is the result of some unanticipated change C) No, but they do moderate business cycles D) No, they increase the likelihood that a business cycle occurs E) No, they make business cycle fluctuations more severe
Which of the following goods is likely to have an income elasticity of demand greater than one?
A) Salt B) Gasoline C) Diamond jewelry D) Bread
Refer to Figure 4-4. At a price of $18 consumers are willing to buy 40 pounds of tiger shrimp. Is this an economically efficient quantity?
A) Yes, because $18 shows what consumers are willing to pay for the product. B) No, the marginal benefit of the 40th unit exceeds the marginal cost of that 40th unit. C) Yes, otherwise consumers would not buy 40 units. D) No, the marginal cost of the 40th unit exceeds the marginal benefit of the 40th unit.
An unanticipated increase in the money supply will lead to
a. a decline in interest rates, an increase in investment, and an increase in aggregate demand. b. a decline in interest rates, a decrease in investment, and an increase in aggregate demand. c. a decline in interest rates, an increase in investment, and a decline in aggregate demand. d. an increase in interest rates, an increase in investment, and an increase in aggregate demand. e. a decline in interest rates, a decline in investment, and a decline in aggregate demand.