Which of the following about business cycles is true?
a. A "depression" is a recession that is mild and relatively brief.
b. The expansions and contractions of real world business cycles last varying lengths of time.
c. The timing of business fluctuations is regular and, therefore, easily predictable.
d. During the recessionary phase of the business cycle, the rate of unemployment is generally quite low.
B
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The cranberry market is perfectly competitive. Reports that consuming cranberries can lead to improved health result in a permanent increase in the demand for cranberries and an immediate upward jump in the price of cranberries
As time passes, the price of cranberries ________ and the initial firms' economic ________. A) falls; profit will be eliminated B) rises still higher; loss will be eliminated C) rises still higher; profit will not change D) falls; loss will be increased E) falls; profit will not change
In the above figure, suppose the economy had been at point A and now is at B. What could have led to the movement to B?
A) a tax hike B) an increase in government expenditures on goods and services C) Winter storms cause factories in the north to be shut down for several weeks. D) an increase in the money wage rates