Business cycle
What is meant by the term business cycle as described by economists?
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It refers to alternating increases and decreases in the level of business activity which is measured by the level of real GDP. The changes in activity levels are manifested in other variables like consumption spending, interest rates, consumer confidence levels, business confidence, unemployment levels, inflation rate, among many other indicators.
The hypothetical information in the following table shows what the economic situation will be in 2015 if the Fed does not use monetary policy: Year Potential GDP Real GDP Price Level 2014 $15.2 trillion $15.2 trillion 110.0 2015 $15.6 trillion $15.8 trillion
What do you mean by the term Competitive market?
The practice explores how monetary policy influences the economy and the type of factors which are significant in finding out the Monetary Policy Committee’s decision.
Categorize the borrowings and recovery of loans into capital and revenue receipts of government budget. Give reason too.
Determine the value of MPC whenever MPS is zero? Answer: Whenever MPS = 0, MPC = 1 – 0 = 1.
Why change in stock is considered a portion of final expenditure? Answer: The Unsold stocks left with producers are supposed as purchased by the producers themselve
Imperfect information at times causes consumer’s attempts to maximize their contentment to fail since: (i) Prospects are imperfectly realized, and trial-and-error prototypes can lead to mistakes. (ii) Sellers might exploit asymmetric information
A tax will be backward-shifted totally when the: (i) demand curve is vertical and the supply curve is slopes up. (ii) demand curve slopes down and the supply curve is vertical. (iii) supply curve is perfectly elastic and the demand cu
As longer time periods are taken and a bigger range of adjustments (or substitutions) become obtainable, then demand curves tend to become: (1) flatter, as supply curves become steeper. (2) Steeper as supply curves become flatter. (3) Flatter, and therefore do supply
Briefly explain the four supply factors in economic growth?
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