The four phases of the business cycle are
A. expansion, peak, recession, trough
B. prosperity, recession, depression, recovery
C. inflation, recession, stagflation, expansion
D. consumption, investment, government purchases, and net exports
Answer: A. expansion, peak, recession, trough
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When prices rise:
A) money supply tends to rise. B) menu costs tend to fall. C) consumers' purchasing power falls. D) money demand tends to fall.
Common resources are overused because:
a) the marginal private benefit will always exceed the marginal social cost b) the marginal social benefit is not taken into consideration by producers c) social costs are controlled by quotas d) the social costs outweigh the private costs
Supply-side economics is based on the theory that:
A. budget deficits will stimulate demand, output, and employment. B. budget deficits will lead to higher interest rates, which will weaken their expansionary impact. C. higher tax rates will increase tax revenues. D. increases in aggregate supply lower the price level.
Ceteris paribus, for a monopoly to sell more output, it must lower its price.
Answer the following statement true (T) or false (F)