You want to invest in a firm whose profits show large fluctuations throughout the business cycle. Which of the following would you invest in?
A. A corporation that depends heavily on business fixed investment
B. A corporation that depends heavily on government purchases
C. A corporation that depends heavily on consumer services
D. A corporation that depends heavily on consumer nondurables
Answer: A
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What is the marginal rate of substitution, and what role does it play in determining the consumer’s optimum choice?
What will be an ideal response?
All else held constant, an increase in the price of tablets will result in a
A. decrease in the demand for tablets. B. leftward shift of the demand curve for tablets. C. movement up and to the left along the demand curve for tablets. D. rightward shift of the demand curve for tablets.
Suppose potential income is $60 billion, actual income is $40 billion, and expenditures don't vary with income. If the actual budget deficit is $4 billion and the marginal tax rate is 20 percent, the structural deficit:
A. is $4 billion. B. is zero. C. is between zero and $4 billion. D. cannot be determined from the given information.
In the basket of goods that is used to compute the consumer price index, which of the following categories of consumer spending is the smallest?
a. food & beverages b. recreation c. housing d. apparel