Suppose the index of leading economic indicators begins to decline for several months. Which of the following economic events will likely follow?
A. a recession
B. severe inflation
C. greater employment
D. higher investment
Answer: A
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If the interest rate received in Mexico is greater than that obtained in the United States,
A) the demand for loans will increase in Mexico. B) the supply of loans will decrease in the United States. C) the supply of loans will decrease in Mexico. D) the demand for loans will decrease in the United States.
Increases in government expenditures and large budget deficits are projected for 2014-2020 . If the economic recovery is weak and growth is sluggish during this decade, this will be
a. supportive of the Keynesian view, but inconsistent with the crowding-out, new classical, and supply-side theories. b. inconsistent with the Keynesian view, but supportive of the crowding-out, new classical, and supply-side theories. c. inconsistent with both Keynesian and non-Keynesian theories. d. supportive of both Keynesian and non-Keynesian theories.
A proposal to build a dam on a wild river may look like a good idea from the cost/benefit study done by the Army Corps of Engineers, but an analysis done by the Sierra Club might suggest that the dam would be a complete waste of money. When different groups give us radically different cost/benefit results:
A. we should conclude that the best way to decide who is telling the truth is to find which group has the best intentions. B. the studies may still be useful if we can see the underlying assumptions and estimates of each group. C. we have an example of how cost/benefit analysis does not work as a way of forming policy. D. we should realize that sometimes it is best to trust in the political process rather than try to use an economic approach.
Assuming the total population is 200 million, the labor force is 100 million, and 92 million workers are employed, the unemployment rate is:
A. 10 percent. B. 4 percent. C. 6 percent. D. 8 percent.