Which of the following is a period of decreasing output that is severe and long lasting?
a. business cycle
b. expansion
c. peak
d. recession
e. depression
E
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According to real business cycle models,
A) the economy is normally at potential GDP. B) unexpected changes in monetary policy are the major source of fluctuations in real GDP. C) the long-run Phillips curve is negatively sloped. D) the economy is normally operating below the natural rate of unemployment.
Which of the following is not an assumption of the productions possibilities frontier?
a. A country produces only two goods or types of goods. b. Technology does not change. c. The amount of available resources does not change. d. There is a fixed quantity of money.
Suppose Chris is offered the following gamble: with probability 0.1 he will win $90, with probability 0.4 he will win $50, and with probability 0.5 he will lose $60. The expected value of this gamble is ________.
A. $1 B. $2 C. -$1 D. $0
If the market price of coffee is $3.00 per pound but the government will not allow coffee growers to charge more than $2.00 per pound of coffee, which of the following will happen?
A. Demand must eventually decrease so that the market will come into equilibrium at a price of $2.50. B. The market will be in equilibrium at a price of $2.00. C. There will be a shortage of coffee. D. Supply must eventually increase so that the market will come into equilibrium at a price of $2.50.