Economists use the term "business cycle" to refer to:
a. the growth of small businesses into major corporations
b. qualitative changes in products resulting from improved technology.
c. fluctuations in economic activity, measured by GDP or unemployment.
d. periods of increase or decrease in the rate of inflation.
c
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Under the gold standard, when a nation had a deficit in its balance of payments,
A) interest rates would rise which would reduce foreign investment. B) interest rates would fall which would increase foreign investment. C) gold would flow to foreign residents and the domestic money supply would decrease. D) gold would flow into the country leading to an increase in the domestic money supply.
With only two goods, if the income effect is in the opposite direction as the substitution effect but the substitution effect dominates then the good is
a. normal b. inferior but not Giffen c. Giffen d. There is not enough information to answer.
Which of the following conditions is true for a nation operating at a point lying inside its production possibilities curve?
a. The nation is experiencing a technological breakthrough in one of its key industries. b. The nation is clearly utilizing its resources efficiently. c. The nation is producing the maximum output that can be produced with a limited quantity of resources. d. The nation is not utilizing its resources efficiently. e. The nation is producing the maximum output that can be produced with its unlimited quantity of resources.
Beginning at the vertical axis intercept, as a consumer moves down the budget line, she will find that
a. the marginal utility per dollar spent on the vertical axis good decreases b. the marginal utility per dollar spent on the vertical axis good increases c. the marginal utility per dollar spent on the horizontal axis good increases d. the marginal utilities per dollar spent on both goods increase e. the marginal utilities per dollar spent on both goods remain constant along that particular budget line