GDP is a good proxy for the business cycle itself since ________
A) its real consumption spending component is procyclical and coincident
B) its real investment spending component is procyclical and coincident
C) it typically goes up in a boom and down in a recession
D) all of the above
E) none of the above
D
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
How is a duopoly model with homogeneous products similar to a prisoners' dilemma game?
What will be an ideal response?
"By producing at an output rate at which marginal revenue equals marginal cost, a firm is definitely making positive economic profits." Do you agree or disagree? Why?
What will be an ideal response?
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, as the economy moves from Point E to Point A, the opportunity cost of hybrid cars, measured in terms of motorcycles
A. initially increases, then decreases. B. increases. C. decreases. D. remains constant.