The phase in the business cycle in which real GDP declines is called a:
a. trendline.
b. peak.
c. recession.
d. recovery.
e. trough.
c
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In the aggregate expenditure (AE) model, when real GDP exceeds aggregate planned expenditure, actual inventories ________ planned inventories and real GDP ________
A) are less than; decreases B) exceed; increases C) exceed; does not change D) are less than; increases E) exceed; decreases
In the long run, monopolistically competitive firms earn zero economic profits.
Answer the following statement true (T) or false (F)
Demand is elastic along the upper half of a linear demand curve, which means that a decrease in price will increase the quantity sold by a larger percentage amount.
Answer the following statement true (T) or false (F)
If market interest rates fall, the selling price of existing bonds in the market will, ceteris paribus,
A. Fall. B. Rise. C. Not change. D. Rise or fall based on other market conditions.