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.

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(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

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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.

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