A leading variable ________
A) reaches a peak or trough before the turning point of the business cycle
B) reaches a peak or trough after the turning point of the business cycle
C) reaches a peak or trough at the same time as the turning point of the business cycle
D) all of the above
E) none of the above
A
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Which one of the following statements is TRUE for BOTH perfect competition and monopolistic competition?
A) Each type of firm faces a downward sloping demand curve. B) Each type of firm produces a homogeneous product. C) In the long run, firms in both industries make zero economic profit. D) Each type of firm competes on product quality and price.
Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and net nonreserve-related international borrowing/lending in the context of the Three-Sector-Model?
a. The real risk-free interest rate rises, and net nonreserve-related international borrowing/lending becomes more negative (or less positive). b. The real risk-free interest rate rises, and net nonreserve-related international borrowing/lending becomes more positive (or less negative). c. The real risk-free interest rate falls, and net nonreserve-related international borrowing/lending becomes more negative (or less positive). d. The real risk-free interest rate and net nonreserve-related international borrowing/lending remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.