The period of time in which the level of output moves from a trough to a peak is called a:
A. recovery or expansion.
B. depression.
C. contraction or recession.
D. plateau.
Answer: A
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Suppose a price floor is set by the government above the market equilibrium price. Which of the following will result?
a. There will be a surplus. b. The quantity demanded will exceed the quantity supplied. c. The demand curve will shift to the left. d. None of these.
According to the cost disease of the personal services, service activities that require direct personal contact
A. tend to fall in price relative to other goods and services. B. tend to rise in price relative to other goods and services. C. follow price patterns similar to other goods and services. D. tend to move up and down in price ignoring the rest of the market.
Joe's Taco Hut can purchase a delivery truck for $20,000 and Joe estimates it will generate a net income (after taxes, maintenance and operating costs) of $4,000 per year. His other option is to go to work for someone else earning net income of $3,000 per year. He should:
A. not purchase the truck if the real interest rate is greater than 1 percent. B. purchase the truck if the real interest rate is less than 5 percent. C. purchase the truck if the real interest rate is greater than 5 percent. D. purchase the truck if the real interest rate is less than 15 percent.
Which of the following statements about the United States during the twentieth century is correct?
A) Output growth has been approximately equal to employment growth. B) Output growth has been slower than employment growth. C) Output growth has been faster than employment growth. D) Output has increased largely due to monetary and fiscal policy. E) Output has decreased largely due to monetary and fiscal policy.