Practice Your Knowledge of Business Cycles. Explain each of your choices.(A) For two straight quarters, business inventories increase at a sharp rate. This most likely indicates* an expanding economy* a recovering economy the beginning of* a recession an increase in inflation* a record unemployment rate(B) At which point in the business cycle is there the largest inflationary gap?* The peak*The trough* During expansionDuring contraction* At full employment(C) If the consumer price index begins to increase dramatically, which of the following is likely true?* The output gap is positive and near the peak.* The output gap is positive and near the trough.* There is no output gap and the economy is growing.* The output gap is negative and near the peak.The output gap is negative and near the trough.

Since you've posted multiple independent questions, according to our guidelines, only the first…

(A) For two straight quarters, business inventories increase at a sharp rate. This most likely indicates * an expanding economy * a recovering economy the beginning of * a recession an increase in inflation a record unemployment rate

(A) For two straight quarters, business inventories increase at a sharp rate. This most likely indicates * an expanding economy * a recovering economy the beginning of * a recession an increase in inflation a record unemployment rate

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: Following a real GDP - trough; increases trough; decreases peak; increases Otrough; decreases for…

A: Answer: Trough: it refers to the lowest point of declining business activities. After the trough,…

Q: To achieve full employment, an economy: would have everyone in the labor force employed. would have…

A: Unemployment rate is sum of structural unemployment rate, frictional unemployment rate and cyclical…

Q: The long run aggregate supply curve is vertical because a. the actual price level may not equal the…

A: Equilibrium is where Aggregate demand curve intersects the aggregate supply curve. AD curve is…

Q: 12. An economy has the following data: Current Unemployment Rate = 3.5%; Current Inflation Rate…

A: Real GDP is the inflation adjusted measure of the value of all goods and services produced in an…

Q: a. What is real GDP per capita in year 2? $ 54500 b. What is real GDP in year 2? EA trillion

A: Real GDP per capita is the GDP that is allocated to each of the person in the economy. In other…

Q: (1A) Typically, if consumer and business confidence is falling then ________ and if consumer and…

A: With fall in confidence of consumers and investors, the consumption and investment will fall which…

Q: When there is a recessionary gap: a. Employment exceeds full employment. b. Employment equals full…

A: Gross domestic product is the value of final goods and services produced in the economy within a…

Q: Inflation and unemployment are the twin evils bedeviling the economy. Discuss the relationship…

A: Inflation is an economic concept that refers to a sustained increase in the overall level of prices…

Q: If the employment rate of output exceeds the planned aggreagte expenditure what will happen to the…

A: Keynes posited that unemployment may endure due to insufficient demand in the economy. Keynes was of…

Q: When a recessionary gap exists, actual output______ potential output and the rate of inflation will…

A: A recessionary gap, or contractionary gap, happens when a country's genuine GDP is lower than its…

Q: If an economy is producing more than its full-employment GDP, what is likely to happen?

A: GDP measures the total value of all products and services that have crossed final stage of…

Q: A decrease in real GDP at the same time that nominal GDP increases would be consistent with: None…

A: Nominal GDP= Current year quantity × Current year price. Real GDP = Current year quantity × Base…

Q: The graph suggests that a main macroeconomic problem facing this economy is: a Price Level (P) n Pe…

A: In the given question, a graph is given of an economy and the main macroeconomic problem has to be…

Q: d. The consequence of a negative GDP gap is that society must forgo goods and services that were not…

A: Gross Domestic Product (GDP) is a measure of the total value of goods and services produces within a…

Q: Notice that real GDP trends upward over time but experiences ups and downs in the short run. These…

A: The total worth of all products and services produced inside a nation's boundaries over a certain…

Q: Point E1 from the pictures represent what a. The potential GDP b. inflammatory gap c. Deflationary…

A: An inflammatory gap refers to the difference between the current real GDP and the potential GDP. But…

Q: When an economy is operating in a positive output gap (Inflationary Gap) which of the following must…

A: An inflationary gap is where potential GDP is less than the actual real GDP in the economy.

Q: Which of the following events may lead to deflation? A. decrease in government spending during a…

A: Deflation is the decrease in average price level of goods and services in the economy.

Q: A vertical long-run aggregate supply curve shows that: (a) wages and prices are sticky. (b) changes…

A: the vertical AS curve means that the at each level of price we have the same level of output or…

Q: If the government enacts an expansionary policy during a time of full employment, ______. A.…

A: Long run aggregate supply (LRAS) curve demonstrates the full employment level of output (or natural…

Q: Give two examples of goods or services that you have seen inflate dramatically and also deflate…

A: There can be so many example in this aspect.

Q: Explain the fundamental causes of nations business cycle fluctations.Also examine the relationship…

A: In an economy, the fall or rise in the production output of commodities and services are described…

Q: Consider 2019 USA nominal GDP value was $20 trillion and 2020 was $23 Calculate its nominal growth…

A: 1. Given, Nominal GDP value in 2019 = $20 trillion Nominal GDP value in 2020 = $23 trillion To find,…

Question

Practice Your Knowledge of Business Cycles. Explain each of your choices.
(A) For two straight quarters, business inventories increase at a sharp rate. This most likely indicates
* an expanding economy
* a recovering economy the beginning of
* a recession an increase in inflation
* a record unemployment rate
(B) At which point in the business cycle is there the largest inflationary gap?
* The peak
*The trough
* During expansion
During contraction
* At full employment
(C) If the consumer price index begins to increase dramatically, which of the following is likely true?
* The output gap is positive and near the peak.
* The output gap is positive and near the trough.
* There is no output gap and the economy is growing.
* The output gap is negative and near the peak.
The output gap is negative and near the trough.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Write an introduction

VIEW

Step 2: Explain the correct option

VIEW

Step 3: Explain the incorrect options

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Problem 10-05 algo Nominal GDP increased from roughly $12 trillion in 2004 to $20 trillion in 2018. In the same period prices rose on average by roughly 34 percent. In percentage terms, how much did GDP increase by?
Display a situation of worsening stagflation in the USA economy using diagram(s)
Is the equilibrium at full employment, inflation or recession? Price level Aggregate Demand Aggregate Potential GDP Supply 50 $700 $100 100 $600 $200 150 $450 $450 200 $300 $480 250 $220 $500 300 $150 $510 $510 350 $100 $512
3 Two countries A & B have completely fixed and flexible prices respectively. Consider this data GDP A Prices A GDP B Prices B year 1 5200 units 26 5200 units 26 year 2 there occurs a negative demand shock. A has a 30% decline in output. B has a 30% decline in prices. Compute Real GDP in A and B in year 1 and 2. 4 answers. Which county would experience a recession? Why?
Potential GDP Select one: A. never changes. B. increases as the price level rises. C. is the level of real GDP when unemployment is zero. D. does not vary with the price level. E. increases as the quantity of money in the economy increases.
What is inflationary gap? Select one: When aggregate expenditures are greater than the full employment level causing a demand pull-inflation When aggregate expenditures are greater than full employment level causing cost push inflation None of the options are correct It is the gap between a developed nation GDP and an under-developed/ developing nation GDP When aggregate expenditures are inadequate to bring about a full employment level