The expansionary phase of the business cycle is characterized by
a. decreasing real output and increasing unemployment.
b. decreasing real output and declining unemployment.
c. increasing real output and increasing unemployment.
d. increasing real output and declining unemployment.
D
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We often witness prices of water, gasoline and construction materials surge in a region just before a major storm hits. Some call this "price gouging." In the economic way of thinking, however, those higher prices are caused by
A) an increase in supply and an increase in demand. B) an increase in supply and a decrease in demand. C) a decrease in supply and an increase in demand. D) a decrease in supply and a decrease in demand. E) practices that are not connected to underlying supply and demand conditions.
If the market for roller blades is at a competitive equilibrium, and there are no external costs or benefits, then
A) marginal social benefit is equal to marginal social cost. B) the sum of consumer surplus and producer surplus is maximized. C) resources are being used efficiently. D) All of the above answers are correct.
If the economy is growing 5% a year and GDP is $1000 billion, the additional revenues available to meet interest payments on the government deficit would be, ceteris paribus,
A) 50. B) 500. C) It depends upon the amount of new debt issued. D) There would be no additional revenues.
The notion of opportunity cost allows the measurement of trade-offs.
Answer the following statement true (T) or false (F)