Which of the following will most likely occur during the recessionary phase of a business cycle?
A. Real GDP rises, and the unemployment rate falls.
B. Real GDP declines, and the rate of inflation rises.
C. The sales of most businesses decline, and the unemployment rate rises.
D. Inflation rises, and employment/population ratio falls.
Answer: C
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The quantity of money demanded will increase as interest rates increase
Indicate whether the statement is true or false
If real GDP exceeds potential GDP, to move the economy to potential GDP the Fed
A) raises the federal funds rate to increase potential GDP but not real GDP. B) lowers the federal funds rate to decrease real GDP but not potential GDP. C) raises the federal funds rate to decrease real GDP but not potential GDP. D) lowers the federal funds rate to increase potential GDP but not real GDP. E) raises the federal funds rate to decrease both real GDP and potential GDP.
Which of the following best describes a cartel?
a. As a monopolist, a group of monopolistically competitive firms that jointly reduce output and raise the price. b. As a monopolist, a group of cooperating oligopolists that jointly reduce output and raise the price. c. A monopolist that reduces output and raises price. d. A group of identical non-cooperative oligopolists that are able to reproduce a monopoly equilibrium through price rivalry.
In a regression model, if variance of the dependent variable, y, conditional on an explanatory variable, x, or Var(y|x), is not constant, _____.
A. the t statistics are invalid and confidence intervals are valid for small sample sizes B. the t statistics are valid and confidence intervals are invalid for small sample sizes C. the t statistics and the confidence intervals are valid no matter how large the sample size is D. the t statistics and the confidence intervals are both invalid no matter how large the sample size is