In which of the following conditions is the inflation rate likely to rise and the unemployment rate likely to fall?
A. stagflation
B. boom
C. recession
D. hyperinflation
Answer: B
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Local governments usually rely on the ________ tax to fund schools, libraries, and public services such as police and fire protection
A) payroll B) excise C) value-added D) property
Total revenue decreases as output increases when demand is:
A. downward sloping. B. perfectly elastic. C. price inelastic. D. price elastic.
In the Keynesian model, the larger the marginal propensity to consume, the:
a. larger the multiplier. b. larger the marginal propensity to save. c. higher the income level of the economy. d. smaller the change in income derived from a given change in government spending.
Answer the following statements true (T) or false (F)
1. The impact of a hurricane in Florida would be an example of a random fluctuation in business activity. 2. During a trough in the business cycle, the economy eventually reaches the bottleneck stage. 3. During a contraction in the business cycle, the multiplier effect leads to cumulative declines in output, employment, and income. 4. Stabilizing measures by the federal government eliminate the business cycle. 5. The U.S. economy has experienced no minor cycles since World War II.