8.Which sentence is wrong about business cycle?It is the change in the GDP in the short run between recession and expansion.b.Taxes increases in periods of expansion.Deficit decreases in periods of depressiond.The interest rate is higher in periods of expansion.9.Assume that Y* 1?a. If Ps increases then product i will be exported.b. If P decreases then product i will be exported.c. If e increases and P³ decreases at the same rate then it will be indifferentbetween trading the product overseas and manufacturing it at home.d. If e decreases then product i may be exported.12.Assume that Y*-Yfull and that the global interest rate (r) has increased. Whichof the following is true in the long run?Inflation rate will necessarily increase.The local interest rate (r) will necessarily increase.Investments will necessarily decrease.All the above.i.iii.iv.11.i.ii.iii.iv.

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8. Which sentence is wrong about business cycle? a. It is the change in the GDP in the short run between recession and expansion. b. Taxes increases in periods of expansion. c. Deficit decreases in periods of depression d. The interest rate is higher in periods of expansion.

8. Which sentence is wrong about business cycle? a. It is the change in the GDP in the short run between recession and expansion. b. Taxes increases in periods of expansion. c. Deficit decreases in periods of depression d. The interest rate is higher in periods of expansion.

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Chapter1: Making Economics Decisions

Section: Chapter Questions

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Question

8.
Which sentence is wrong about business cycle?
It is the change in the GDP in the short run between recession and expansion.
b.
Taxes increases in periods of expansion.
Deficit decreases in periods of depression
d.
The interest rate is higher in periods of expansion.
9.
Assume that Y*<Yfull in the short run. What should not the central bank do in
the short run in order to keep prices unchanged in the long run?
The central bank should increase the targeted inflation rate.
The central bank should buy bonds.
The central bank should increase the targeted interest rate.
The central bank should decrease the targeted interest rate.
10.
Which statement is correct?
a.
According to Modigliani and Friedman, a onetime change in taxes will change
consumption only at the year where taxes had changed.
b.
According to Ricardo, a fiscal policy that increases budget deficit has the same
effect as a fiscal policy that increases taxes.
c.
According to Keynes, a onetime change in taxes will not change consumption
at the year where taxes had changed.
d.
None of the above is correct.
Which statement is wrong if E-
> 1?
a. If Ps increases then product i will be exported.
b. If P decreases then product i will be exported.
c. If e increases and P³ decreases at the same rate then it will be indifferent
between trading the product overseas and manufacturing it at home.
d. If e decreases then product i may be exported.
12.
Assume that Y*-Yfull and that the global interest rate (r) has increased. Which
of the following is true in the long run?
Inflation rate will necessarily increase.
The local interest rate (r) will necessarily increase.
Investments will necessarily decrease.
All the above.
i.
iii.
iv.
11.
i.
ii.
iii.
iv.

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