A detailed history of business cycles is known as a
A) historical decomposition.
B) trend analysis.
C) Hodrick—Prescott filter.
D) business cycle chronology.
D
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Refer to Figure 2-18. Which two arrows in the diagram depict the following transaction: Lizzie Haxem hires "The Paint Pros," a professional painting company, to paint her home
A) K and G B) K and M C) J and G D) J and M
Refer to the above figure. Suppose the economy is at E and the government uses an expansionary fiscal policy to move the aggregate demand curve to AD2. In the end, the aggregate demand curve is still AD1. A possible reason for this is that
A) the economy is already at full employment. B) the increased borrowing causes higher interest rates, which encourage people to save more and increase investment spending due to the extra saving. C) people increase saving because they anticipate higher future taxes, resulting in a reduction in current consumption spending that offsets the increased government spending. D) some of the increased government spending is not counted in GDP.
Macaroni and cheese are considered to be
a. normal goods b. complementary goods c. substitute goods d. equilibrium goods e. market-day goods
Equilibrium, in the short run, is achieved when:
a. differences in rates of return cause investors to purchase and sell currency and thereby change the spot rate of exchange. b. the government recognizes a problem and takes action to correct it. c. traders adjust their expectations to match reality. d. inflation falls to zero.