Which of the following schematics most accurately represents economic fluctuations during a business cycle?
A) Shock -> Spending response by households and firms -> Multiplier effect -> Change in real GDP
B) Shock -> Multiplier effect -> Spending response by households and firms -> Change in real GDP
C) Shock -> Multiplier effect -> Change in real GDP -> Spending response by households and firms
D) Shock -> Change in real GDP -> Spending response by households and firms -> Multiplier effect
A
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Government agencies, such as the National Science Foundation, subsidize basic research because in the absence of a subsidy too little research would be conducted
a. True b. False Indicate whether the statement is true or false
If a perfectly competitive firm were to raise its price above the market price, it would
A. sell slightly less than at the market price. B. sell significantly less than at the market price. C. sell slightly more than at the market price. D. sell nothing.