Which of the following best describes a typical business cycle?
A. Economic expansions are followed by economic contractions.
B. Inflation is followed by unemployment.
C. Stagflation is followed by inflationary economic growth.
D. Trade surpluses are followed by trade deficits.
Answer: A
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Discuss how brand names may enhance the efficiency of markets in a less developed country
In the ________, the perfectly competitive firm will react to profits by __________________________.
a. short run; increasing the quality of products b. long run; tailoring their quality controls c. short run; reducing its labor inputs d. long run; increasing its production
A wheat farmer sells wheat in a perfectly competitive market and hires labor in a perfectly competitive market. The market price of wheat is $2 a bushel, the wage rate is $10, the farmer employs five workers and the marginal product of the fifth worker is 3 bushels. What would you advise this farmer to do?
A. Do nothing because the wage rate and the marginal product of the last worker hired are equal. B. Reduce employment because the wage paid is more than the marginal revenue product. C. Reduce the product price so that the wage and marginal revenue product will be equal. D. Increase employment because the wage paid is less than the marginal revenue product.
Refer to the information provided in Figure 3.4 below to answer the question(s) that follow.
Figure 3.4Refer to Figure 3.4. If consumer income increases, the demand for tuna fish sandwiches shifts from D0 to D1. This implies that tuna fish sandwiches are a(n)
A. complementary good. B. substitute good. C. normal good. D. inferior good.