An economy in a downward phase of the business cycle will, according to internal cycle theory,
a. continue on its downward path unless the government intervenes
b. continue on its downward path unless technological innovation occurs
c. continue on its downward path unless consumption spending increases
d. eventually recover because capital stock wears out and needs replacement
e. eventually recover because saving rates fall
D
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Due to asymmetric information in credit markets, monetary policy may affect economic activity through the balance sheet channel, where an increase in the money supply
A) raises stock prices, lowering the cost of new capital relative to firms' market value, thus increasing investment spending. B) raises firms' net worth, decreasing adverse selection and moral hazard problems, thus increasing banks' willingness to lend to finance investment spending. C) raises the level of bank reserves, deposits, and bank loans, thereby raising spending by those individuals who do not have access to credit markets. D) lowers the value of the dollar, increasing net exports and aggregate demand.
Which of the following observations concerning health care service providers is true? a. Health care providers possess very little market power
b. Price discrimination and collusive behavior are likely to occur. c. Price discrimination is uncommon in the pharmaceutical industry. d. "Natural health care monopolies" are a rarity.
On the supply curve:
A. both quantity and price go on the horizontal axis. B. quantity goes on the horizontal axis and price goes on the vertical axis. C. quantity goes on the vertical axis and price goes on the horizontal axis. D. it doesn't matter which axis price and quantity are placed on.
Homer buys pizza for $10 and Pepsi for $2. He has income of $100. His budget constraint will shift inward if
a. his income rises to $150. b. the price of pizza, the price of Pepsi, and his income all rise by 50 percent. c. the price of Pepsi falls to $1. d. the price of pizza rises to $12.