As the economy nears the end of an expansion, which of the following do we typically see?
A) falling wages relative to output prices B) rising interest rates
C) rising firm profits D) rising levels of firm investment
B
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What criticism does the textbook level against the cost-plus-markup theory of price setting?
A) The theory does not agree with what businessmen say about price setting. B) The theory does not account for vastly different percentage markups on different products. C) The theory implies firms will sometimes want to set prices below average cost per unit. D) The theory ignores sunk costs. E) All of the above.
What is meant by comparative statics? Explain with an example
What will be an ideal response?
When using extrapolation to forecast
A) a time series of past observations is used. B) there is a large error term in the results. C) predictions can only be made about the future. D) dummy variables can skew the results.
Before the banking industry was deregulated, the interest rates that savings and loan institutions paid to depositors was fixed by the federal government
Indicate whether the statement is true or false