Exhibit 6-1 Business cycle
In Exhibit 6-1, point E represents:
A. recession and a trough.
B. peak and a trough.
C. recession and a peak.
D. recovery and a peak.
Answer: A
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Which of the following statements is true?
a. Total utility is the extra satisfaction from the consumption of a good or service. b. Marginal utility is the amount of satisfaction received from all the units of a good or service consumed. c. The law of diminishing marginal utility states that as more of a good or service is consumed total utility decreases. d. Consumer equilibrium is a combination of goods and services consumed which maximizes total utility from a given budget.
The oversimplified money multiplier formula, when the required reserve ratio is m, is
a. change in money supply = change in reserves × m. b. change in money supply = (1/m) /change in reserves. c. change in money supply = (1/m) × change in reserves. d. change in money supply = m/change in reserves.