Which of the following will most likely occur during the contractionary phase of a business cycle?
What will be an ideal response?
The sales of most businesses decline, and the unemployment rate rises.
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When the policy rate hits its lower bound and inflation keeps falling, this portion of the aggregate demand curve is
A) downward sloping. B) upward sloping. C) flat. D) undetermined.
Attractive industries have all the following, except
a. High supplier power b. Low buyer power c. High entry barriers d. Low rivalry
During most of the period since 1962, federal government spending as a percentage of GDP has hovered around _____
a. 25–30% b. 10–15% c. 17–22% d. 20–25%
How does the effect of changes in foreign demand compare to the effect of changes in the foreign exchange rate?
a. Changes in foreign demand cause a shift in the aggregate demand curve, whereas changes in the foreign exchange rate cause movement along the curve. b. Changes in foreign demand shift the aggregate demand curve rightward, whereas changes in the foreign exchange rate shift the curve leftward. c. Changes in foreign demand cause movement along the aggregate demand curve, whereas changes in the foreign exchange rate cause curve shifts. d. Changes in foreign demand and changes in the foreign exchange rate can both shift the aggregate demand curve.