Refer to the above diagram. The phases of the business cycle from points A to D are, respectively:
A. peak, recession, trough, expansion.
B. expansion, recession, trough, peak.
C. trough, recovery, expansion, peak.
D. peak, recession, expansion, trough.
Answer: A
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The marginal propensity to import (mpi), where M = imports, is defined as
A) M * Y. B) ?M/?Y. C) M - Y. D) ?M * ?Y.
If all firms in a monopolistically competitive industry faced the same demand and cost curves pictured in the above figure
A) new firms will enter the industry. B) some firms will exit the industry. C) their economic profit would be zero. D) they would each produce 60 units.
In the United States in 2013, the Bureau of Economic Analysis began counting spending on research and development as ________, which counts as a part of GDP
A) intermediate goods B) investment C) consumption D) depreciation
Interest rate fluctuations
A) are usually not considered to be of much importance and are largely ignored by the Fed. B) have the paradoxical effect of increasing the rate of economic growth. C) make it difficult for households and firms to plan for the future. D) have largely been eliminated by the Fed during the past two decades.