Business Cycles & Gaps

Recessions, potential output, stabilizers. Ideal for competitive exams and economics prep.

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QUESTION NO 01

The multiplier effect suggests that?

Answer: An initial spending increase can raise income by more than itself

Respending of income amplifies effects.

Shahzad Mahota @shahzad-mahota

302 Quizzes

2930 Questions

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QUESTION NO 02

Stagflation refers to?

Answer: High inflation with stagnant growth/high unemployment

It challenges simple demand-management recipes.

Shahzad Mahota @shahzad-mahota

302 Quizzes

2930 Questions

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QUESTION NO 03

Aggregate demand includes?

Answer: C + I + G + (X − M)

Consumption, investment, government, net exports.

Shahzad Mahota @shahzad-mahota

302 Quizzes

2930 Questions

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QUESTION NO 04

A progressive tax system means?

Answer: Higher incomes face higher tax rates

Average/marginal rates rise with income.

Shahzad Mahota @shahzad-mahota

302 Quizzes

2930 Questions

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QUESTION NO 05

Crowding out occurs when?

Answer: Government borrowing raises rates and reduces private investment

Public borrowing can displace private spending.

Shahzad Mahota @shahzad-mahota

302 Quizzes

2930 Questions

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QUESTION NO 06

The Phillips curve (traditional) suggested a trade-off between?

Answer: Inflation and unemployment

Short-run trade-offs have been debated/refined.

Shahzad Mahota @shahzad-mahota

302 Quizzes

2930 Questions

00 Likes

QUESTION NO 07

Hyperinflation is?

Answer: Extremely rapid price increases

It destroys confidence in money.

Shahzad Mahota @shahzad-mahota

302 Quizzes

2930 Questions

00 Likes

QUESTION NO 08

A budget deficit means?

Answer: Government spending exceeds revenue

Deficits add to public debt when financed by borrowing.

Shahzad Mahota @shahzad-mahota

302 Quizzes

2930 Questions

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QUESTION NO 09

Potential output is?

Answer: Sustainable output at full employment of resources

Gaps vs potential indicate slack or overheating.

Shahzad Mahota @shahzad-mahota

302 Quizzes

2930 Questions

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QUESTION NO 10

Deflation is?

Answer: A sustained fall in the general price level

It can raise real debt burdens.

Shahzad Mahota @shahzad-mahota

302 Quizzes

2930 Questions

00 Likes

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Shahzad Mahota

@shahzad-mahota

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Business Cycles & Gaps

The multiplier effect suggests that?

Stagflation refers to?

Aggregate demand includes?

A progressive tax system means?

Crowding out occurs when?

The Phillips curve (traditional) suggested a trade-off between?

Hyperinflation is?

A budget deficit means?

Potential output is?

Deflation is?

Published By

Shahzad Mahota

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00

00

00

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Business Cycles & Gaps

The multiplier effect suggests that?

Explanation

Stagflation refers to?

Explanation

Aggregate demand includes?

Explanation

A progressive tax system means?

Explanation

Crowding out occurs when?

Explanation

The Phillips curve (traditional) suggested a trade-off between?

Explanation

Hyperinflation is?

Explanation

A budget deficit means?

Explanation

Potential output is?

Explanation

Deflation is?

Explanation

Published By

Shahzad Mahota

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00

00

00

00

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