Which of the following is a correct sequence of events during an expansion?
A. Unemployment rises, income falls, tax revenue falls, unemployment benefits rise, and the budget deficit rises.
B. Unemployment rises, income falls, tax revenue rises, unemployment benefits fall, and the budget deficit falls.
C. Unemployment falls, income falls, tax revenue falls, unemployment benefits rise, and the budget deficit falls.
D. Unemployment falls, income rises, tax revenue rises, unemployment benefits fall, and the budget deficit falls.
Answer: D
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If the price level falls and the money wage rate does not change, some firms ________ and there is ________
A) shut down; a leftward shift of the aggregate supply curve B) start up; a rightward shift of the aggregate supply curve C) start up; an increase in potential GDP D) shut down; a decrease in the quantity of real GDP supplied E) shut down; a decrease in potential GDP
Which major actor is at the center of the foreign exchange market?
A) corporations B) central banks C) commercial banks D) non-bank financial institutions E) individual firms