As the economy falls from the peak to the trough of the business cycle:
A. Inflationary pressures should increase as unemployment rises.
B. Cyclical unemployment should increase and real GDP should decline.
C. Frictional unemployment should fall because people find jobs more quickly.
D. Structural unemployment will be eliminated.
B. Cyclical unemployment should increase and real GDP should decline.
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What would happen in the market for loanable funds if the government were to decrease the tax rate on interest income?
a. The supply of loanable funds would shift rightward and investment would increase. b. The supply of loanable funds would shift leftward and investment would decrease. c. The demand for loanable funds would shift rightward and investment would increase. d. The demand for loanable funds would shift leftward and investment would decrease.
A final good is one that
A) is used in the production of another good. B) is a natural resource used to produce a good. C) is purchased as an input in the production process. D) is purchased by its final user.