Business Cycles and Growth Exam Practice Tests - 1650 Verified Questions

Business Cycles and Growth Exam Practice Tests https://quizplus.com/study-set/1332 25 Chapters 1650 Verified Questions

Business Cycles and Growth Exam Practice Tests Course Introduction This course explores the fundamental concepts and empirical patterns of business cycles and long-term economic growth. Students will examine theories that explain fluctuations in aggregate economic activity, including classical, Keynesian, and modern frameworks. Topics include measurement and sources of business cycles, the roles of fiscal and monetary policies, and the impact of technological innovation and productivity changes on sustained growth. Case studies and real-world data analysis equip students with tools to critically evaluate economic trends and policy responses, empowering them to understand how economies expand and contract over time.

Recommended Textbook Macroeconomics 7th Edition by Olivier Blanchard

Available Study Resources on Quizplus 25 Chapters 1650 Verified Questions 1650 Flashcards Source URL: https://quizplus.com/study-set/1332

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Chapter 1: A Tour of the World Available Study Resources on Quizplus for this Chatper 24 Verified Questions 24 Flashcards Source URL: https://quizplus.com/quiz/26586

Sample Questions Q1) What problems remain in advanced countries after the crisis? Answer: Both in the United States and the Euro area,unemployment remains very high.What is behind this persistently high unemployment is low output growth,and behind this low growth are many factors like declining housing prices and low housing investment.Banks are still not in good shape,and bank lending is still tight.Consumers are cutting consumption.And the crisis has led to a large increase in budget deficits,which have in turn led to a large increase in public debt over time.Countries must now reduce their deficits,and this is proving difficult.In some European countries,governments may not be able to adjust and may default on their debt. Q2) Between 2010 and 2014,the annual rate of output growth in China was approximately equal to A)2%. B)5%. C)9%. D)20%. Answer: C Q3) What are the two primary sources of economic growth in China since 1980? Answer: The relatively high output growth in China has occurred as a result of capital accumulation and technological progress. To view all questions and flashcards with answers, click on the resource link above. Page 3

Chapter 2: A Tour of the Book Available Study Resources on Quizplus for this Chatper 62 Verified Questions 62 Flashcards Source URL: https://quizplus.com/quiz/26587

Sample Questions Q1) Explain the three ways GDP can be measured. Answer: GDP can be measured three ways.First,GDP represents the market value of the final goods and services produced in the economy during a given period.This would be obtained by adding C,I,G,and NX.Second,GDP is the sum of the value added by firms.The value added for a firm equals the value of the production (at that stage of the production process)minus the value of the intermediate goods (excluding labor services).The final value of aggregate output can be calculated by either summing the value of all final goods and services OR by summing the value added of all goods and services at each stage of production.And finally,GDP is also the sum of all incomes earned in a given period. Q2) Can an economy maintain high output growth,low unemployment,and low inflation at the the same time? Explain. Answer: It would be very hard to achieve the three objectives at the same time.High output growth leads to low unemployment,which is likely to put pressure on inflation. Q3) Will the CPI and GDP deflator always move together? Explain. Answer: No they will not.Some of the goods included in the GDP deflator (some investment goods)are not included in the CPI.Some of the goods included in the CPI (foreign goods)are not included in the GDP deflator. To view all questions and flashcards with answers, click on the resource link above. Page 4

Chapter 3: The Goods Market Available Study Resources on Quizplus for this Chatper 64 Verified Questions 64 Flashcards Source URL: https://quizplus.com/quiz/26588

Sample Questions Q1) Which of the following would tend to make the multiplier smaller? A)an increase in the marginal propensity to consume B)an increase in the marginal propensity to save C)a reduction in taxes D)a reduction in government spending E) none of the above Answer: B Q2) Equilibrium in the goods market requires that A)production equals income. B)production equals demand. C)consumption equals saving. D)consumption equals income. E) government spending equals taxes minus transfers. Answer: B Q3) Why would consumer decrease consumption even if their disposable income has not changed? Answer: If consumers start worrying about the future and decide to save more,they will decrease c0 and hence consumption.This is what happened at the start of the most recent financial crisis. To view all questions and flashcards with answers, click on the resource link above. Page 5

Chapter 4: Financial Markets Available Study Resources on Quizplus for this Chatper 73 Verified Questions 73 Flashcards Source URL: https://quizplus.com/quiz/26589

Sample Questions Q1) Which of the following is a liability on a bank's balance sheet? A)checkable deposits B)reserves C)loans D)all of the above E) none of the above Q2) Use the market for central bank money to answer this question.Graphically illustrate and explain what effect an increase in the reserve deposit ratio (θ)will have on this market and on the equilibrium interest rate. Q3) When a liquidity trap situation exists,we know that A)an open market operation will have no effect on the supply of money. B)an open market operation will have no effect on the monetary base. C)fiscal policy will have no effect on the demand for goods. D)expansionary monetary policy will be deflationary. E) none of the above Q4) Which of the following is a component of money? A)coins held by the nonbank public B)bills held by banks C)checkable deposits D)all of the above Page 6 To view all questions and flashcards with answers, click on the resource link above.

Chapter 5: Goods and Financial Marketsthe Is-Lm Model Available Study Resources on Quizplus for this Chatper 74 Verified Questions 74 Flashcards Source URL: https://quizplus.com/quiz/26590

Sample Questions Q1) The LM curve shifts down (or,equivalently,to the right)when which of the following occurs? A)an increase in taxes B)an increase in output C)an open market sale of bonds by the central bank D)an increase in consumer confidence E) none of the above Q2) If government spending and taxes increase by the same amount, A)the IS curve does not shift B)the IS curve shift leftward C)the IS curve shifts rightward D)the LM curve shifts downward Q3) Suppose policy makers decide to reduce taxes.This fiscal policy action will cause which of the following to occur? A)The LM curve shifts and the economy moves along the IS curve. B)The IS curve shifts and the economy moves along the LM curve. C)Both the IS and LM curves shift. D)Neither the IS nor the LM curve shifts. E) Output will change causing a change in money demand and a shift of the LM curve. To view all questions and flashcards with answers, click on the resource link above. Page 7

Chapter 6: Financial Markets Ii: the Extended Is-Lm Model Available Study Resources on Quizplus for this Chatper 85 Verified Questions 85 Flashcards Source URL: https://quizplus.com/quiz/26591

Sample Questions Q1) Let: (1)Pt be the price of one unit of a market basket of goods (i.e.,a composite commodity)in year t; (2)P^et ₊ ₁ be the expected price of one unit of a market basket of goods in year t + 1; (3)π^et ₊ ₁ be the expected rate of inflation between period t and t + 1; and (4)it be the one-year nominal interest rate.Suppose an individual borrows the equivalent of one unit of a composite commodity today.Given this information,which of the following expressions represents (i.e.,is equal to)the real interest rate (rt)? A)(1 + it)(P^et₊₁)/ (Pt) B)(1 + π^et₊₁)/ (1 + it) C){(1 + π^et₊₁)/ (1 + it)} - 1 D){(1 + it)(Pt)/ (P^et₊₁)} - 1 E) none of the above Q2) Which of the following long-term bonds has the lowest interest rate? A)corporate Baa bonds B)U.S. Treasury bonds C)corporate Aaa bonds D)municipal bonds To view all questions and flashcards with answers, click on the resource link above.

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Chapter 7: The Labor Market Available Study Resources on Quizplus for this Chatper 73 Verified Questions 73 Flashcards Source URL: https://quizplus.com/quiz/26592

Sample Questions Q1) A reduction in the minimum wage will tend to cause which of the following? A)an upward shift in the WS curve B)a downward shift in the WS curve C)an upward shift in the PS curve D)a downward shift in the PS curve E) none of the above Q2) Henry Ford's experiment with efficiency wages resulted in A)a dramatic drop in productivity. B)a dramatic increase in the turnover rate. C)a reduction in the layoff rate. D)new problems with the work force, like drunkenness and reckless driving. E) no noticeable effects. Q3) Based on the data provided in the chapter,which of the following represents the largest component of the labor force? A)discouraged workers B)retired individuals C)employed D)unemployed Q4) Explain why nominal wages are a function of the expected price level. Q5) Explain several implications and characteristics of efficiency wage theories. Page 9 To view all questions and flashcards with answers, click on the resource link above.

Chapter 8: The Phillips Curve, the Natural Rate of Unemployment, and Inflation Available Study Resources on Quizplus for this Chatper 61 Verified Questions 61 Flashcards Source URL: https://quizplus.com/quiz/26593

Sample Questions Q1) Explain what is meant by the "wage-price" spiral. Q2) Suppose the Phillips curve is represented by the following equation: πt - πt₋₁ = 20 2ut.Given this information,which of the following is most likely to occur if the actual unemployment in any period is equal to 6%? A)the rate of inflation will tend to increase B)the rate of inflation will be constant C)the rate of inflation will tend to decrease D)none of the above Q3) Which of the following individuals first discovered the relationship between unemployment and inflation? A)Solow B)Samuelson C)Friedman D)Phillips Q4) How will the crisis affect the natural rate of unemployment? Q5) During which decade did the original Phillips curve break down? Also,briefly explain why the original Phillips curve broke during this period. Page 10 Q6) Why has the U.S.natural rate of unemployment fallen since the early 1990s? Q7) What is the difference between deflation and disinflation? To view all questions and flashcards with answers, click on the resource link above.

Chapter 9: From the Short to the Medium Run: the Is-Lm-Pc Model Available Study Resources on Quizplus for this Chatper 34 Verified Questions 34 Flashcards Source URL: https://quizplus.com/quiz/26594

Sample Questions Q1) Okun's law shows that when the unemployment rate is above the natural rate, A)inflation is higher than expected. B)inflation is lower than expected. C)output is below potential. D)output is above potential. Q2) In the IS-LM-PC model,which of the following is assumed to be exogenous? A)G B)C C)I D)Y Q3) Empirically output growth 1% above normal for one year leads to a ________ in the employment rate. A)0.6% B)0.7% C)0.8% D)0.5% Q4) Use the IS-LM-PC model to illustrate how the economy adjusts to an increase in taxes both in the short run and in the medium run. Page 11 To view all questions and flashcards with answers, click on the resource link above.

Chapter 10: The Facts of Growth Available Study Resources on Quizplus for this Chatper 66 Verified Questions 66 Flashcards Source URL: https://quizplus.com/quiz/26595

Sample Questions Q1) Discuss and explain what is meant by the "state of technology." Q2) For this question,assume that the saving rate increases.We know that this increase in the saving rate will cause which of the following? A)a temporary increase in the level of output per capita B)no permanent change in the level of output per capita C)a temporary increase in the rate of growth of output per capita D)a permanently higher rate of growth of output per capita E) none of the above Q3) By 2011,which of the following countries had the highest level of real output per capita? A)United States B)France C)Japan D)United Kingdom Q4) Consider the production function Y = \( \sqrt{\mathrm{K}} \) \( \sqrt{N} \) a.Compute output when K = 81 and N = 100. b.Is this production function characterized by constant returns to scale? Explain. Q5) Briefly explain what effect an increase in the saving rate will have on growth. 12 click on the resource link above. To view all questions and flashcards withPage answers,

Chapter 11: Saving, capital Accumulation, and Output Available Study Resources on Quizplus for this Chatper 74 Verified Questions 74 Flashcards Source URL: https://quizplus.com/quiz/26596

Sample Questions Q1) Suppose depreciation per worker is less than saving per worker.Given this situation,explain what will happen to each of the following variables over time: capital per worker,output per worker,saving per worker,and consumption per worker. Q2) Suppose the following situation exists for an economy: Kt₊₁ / N = Kt / N.Given this information,we know with certainty that A)the economy is operating at the golden rule equilibrium in period t. B)saving per worker is less than depreciation per worker in period t. C)saving per worker is greater than depreciation per worker in period t. D)investment per worker equals depreciation per worker in period t. Q3) Suppose an economy experience a 4% increase in each of the following variables: N,K,and H (human capital).Given this information,we know with certainty that A)Y will increase by more than 4%. B)Y will increase by exactly 4%. C)Y will increase by less than 4%. D)Y will increase by less than 12% but by more than 4%. E) none of the above Q4) Explain the difference between fully funded social security system and pay-as-you-go social security system. To view all questions and flashcards with answers, click on the resource link above. Page 13

Chapter 12: Technological Progress and Growth Available Study Resources on Quizplus for this Chatper 75 Verified Questions 75 Flashcards Source URL: https://quizplus.com/quiz/26597

Sample Questions Q1) To what extent can changes in the rate of technological progress cause permanent changes in the rate of growth of output per worker? Explain. Q2) Which of the following will cause an increase in output per effective worker? A)an increase in population growth B)an increase in the rate of depreciation C)a reduction in the saving rate D)an increase in the rate of technological progress E) an increase in the saving rate Q3) Refer to the information above.Which of the following represents the level of investment needed to maintain a constant capital stock (K)in this economy? A)0.02K B)0.03K C)0.05K D)0.10K E) 0.15K Q4) Explain the different dimensions of technological progress. Q5) Suppose there is an increase in the saving rate.Explain what effect this increase in the saving rate will have on the rate of growth of output per worker. To view all questions and flashcards with answers, click on the resource link above. Page 14

Chapter 13: Technological Progress: the Short, the Medium, and the Long Run Available Study Resources on Quizplus for this Chatper 64 Verified Questions 64 Flashcards Source URL: https://quizplus.com/quiz/26598

Sample Questions Q1) Because of labor hoarding,an increase in output may signal A)an increase in employment. B)a reduction in employment. C)no change in employment. D)a reduction in productivity. Q2) In recent years,the increasing relative wage of skilled labor has been mostly due to A)a decrease in the supply of skilled labor that exceeds the decrease in demand. B)an increase in the demand for skilled labor that exceeds the increase in supply. C)a decrease in the supply of, and increase in the demand for, skilled labor. D)government laws promoting the hiring of skilled labor. E) government subsidies provided to college students. Q3) For this question,assume that the aggregate production function is represented by Y = A.Which of the following represents the marginal cost of producing an additional unit of output? A)W B)W / A C)A / W D)(1 +A)W To view all questions and flashcards withPage answers, 15 click on the resource link above.

Chapter 14: Financial Markets and Expectations Available Study Resources on Quizplus for this Chatper 73 Verified Questions 73 Flashcards Source URL: https://quizplus.com/quiz/26599

Sample Questions Q1) A bond has a face value of $1,000,a price of $1,200,and coupon payments of $100 for two years.The "current yield" of this bond is A)8.33%. B)10%. C)12%. D)83%. E) none of the above Q2) An expected tax increase will tend to cause A)an increase in stock prices. B)a reduction in stock prices. C)no change in stock prices. D)an ambiguous effect on stock prices. Q3) Assume that the current one-year rate is 5% and the two-year rate is 7%.Given this information,the one-year rate expected one year from now is A)5%. B)6%. C)7%. D)9%. E) 12%. To view all questions and flashcards with answers, click on the resource link above. Page 16

Chapter 15: Expectations, consumption, and Investment Available Study Resources on Quizplus for this Chatper 73 Verified Questions 73 Flashcards Source URL: https://quizplus.com/quiz/26600

Sample Questions Q1) Human wealth is A)the present discounted value of expected future after-tax labor income. B)the sum of financial and housing wealth. C)the discounted present value of all financial assets. D)financial wealth minus housing wealth. E) total wealth minus housing wealth. Q2) Human wealth is a function (i.e.,affected by changes in)of which of the following variables? A)future expected income B)future expected taxes C)current interest rates D)all of the above E) none of the above Q3) The user cost of capital is represented by which of the following variables? A)Πt B)rt C)1 / (rt + δ) D)Πt / ( rt + δ) E) none of the above Q4) Explain the difference between "profitability" and "cash flow." Page 17 To view all questions and flashcards with answers, click on the resource link above.

Chapter 16: Expectations, output, and Policy Available Study Resources on Quizplus for this Chatper 70 Verified Questions 70 Flashcards Source URL: https://quizplus.com/quiz/26601

Sample Questions Q1) When answering this question,assume individuals consider only the medium-run effects of changes in future variables when forming expectations of future output and future interest rates Suppose policy makers announce a reduction in future government spending.Which of the following will occur as a result of this expected reduction in government spending? A)a reduction in the expected future interest rate and no change in expected future output B)a reduction in the expected future interest rate and an increase in expected future output C)a reduction in the expected future interest rate and a reduction in expected future output D)a reduction in the expected future interest rate and an ambiguous effect on expected future output Q2) Since the end of 2008,the Federal Reserve has adopted an unconventional monetary tool called A)quantitative easing. B)open market operation. C)change required reserve ratio. D)discount loan. To view all questions and flashcards with answers, click on the resource link above. Page 18

Chapter 17: Openness in Goods and Financial Markets Available Study Resources on Quizplus for this Chatper 81 Verified Questions 81 Flashcards Source URL: https://quizplus.com/quiz/26602

Sample Questions Q1) Suppose the interest parity condition holds.Also assume that the one-year interest rate in the United States is 6% and that the one-year interest rate in Canada is 5%.What does this imply about the current versus future expected exchange rate (for the U.S.and Canadian dollars)? Explain. Q2) The ratio of exports to GDP for the United States in 2014 is approximately equal to A)6%. B)13%. C)21%. D)31%. Q3) For this question,assume the interest parity conditions holds.Also assume that the domestic interest rate is 9% and that the foreign interest rate is 5%.Given this information,we would expect that A)individuals will only hold foreign bonds. B)individuals will only hold domestic bonds. C)the domestic currency is expected to appreciate by 4%. D)the domestic currency is expected to depreciate by 4%. Q4) Explain what factors determine the expected return on a foreign bond. Q5) Discuss what factors could cause a real depreciation. To view all questions and flashcards with answers, click on the resource link above. Page 19

Chapter 18: The Goods Market in an Open Economy Available Study Resources on Quizplus for this Chatper 83 Verified Questions 83 Flashcards Source URL: https://quizplus.com/quiz/26603

Sample Questions Q1) Which of the following will always cause an increase in net exports? A)a reduction in domestic output B)an increase in the real exchange rate C)an increase in government spending D)an increase in investment E) all of the above Q2) The Marshall-Lerner condition is less likely to hold when A)imports and exports are very price-sensitive. B)the trade deficit is large. C)the marginal propensity to consume is very large. D)the marginal propensity to consume if very small. E) none of the above Q3) The existence of the J-curve suggests that a real depreciation will cause A)an initial increase in net exports. B)an initial increase in economic activity. C)a final reduction in net exports. D)an initial reduction in the demand for domestic goods. Q4) Explain what the J-curve is and why it occurs. Q5) Explain what the Marshall-Lerner condition represents. Pageimports. 20 Q6) Explain the determinants of exports and To view all questions and flashcards with answers, click on the resource link above.

Chapter 19: Output, the Interest Rate, and the Exchange Rate Available Study Resources on Quizplus for this Chatper 74 Verified Questions 74 Flashcards Source URL: https://quizplus.com/quiz/26604

Sample Questions Q1) A real appreciation will tend to cause A)an increase in exports. B)a reduction in imports. C)an increase in net exports. D)a reduction in demand for domestic goods. E) none of the above Q2) Assume the exchange rate is fixed.Using the IS-LM model,graphically illustrate and explain what effect a reduction in consumer confidence will have on the domestic economy.In your graphs,clearly label all curves and equilibria. Q3) Suppose a country with a fixed exchange rate decides to reduce the price of its currency.This change in policy is called A)an appreciation. B)a depreciation. C)a peg. D)a devaluation. E) a revaluation. Q4) Explain what the IP curve is and why it is upward sloping. Q5) In an economy operating under flexible exchange rates,explain why the IS curve is Page 21 downward sloping. To view all questions and flashcards with answers, click on the resource link above.

Chapter 20: Exchange Rate Regimes Available Study Resources on Quizplus for this Chatper 69 Verified Questions 69 Flashcards Source URL: https://quizplus.com/quiz/26605

Sample Questions Q1) Suppose a country that has been pegging its currency is faced with a situation where financial market participants now expect some future revaluation.In such a situation,we would generally expect which of the following to occur? A)an increase in the domestic interest rate B)an announcement by the central bank that a large revaluation will occur in the near future C)an increase in demand for the country's currency D)all of the above E) none of the above Q2) Assume that policy makers are pursuing a fixed exchange rate regime.Assume that the economy is initially operating at the natural level (i.e.,Y = Yn).Suppose a reduction in wealth causes households to reduce consumption.This wealth-induced decrease in consumption will cause which of the following to occur? A)The real exchange rate will be permanently higher in the medium run. B)The real exchange rate will be permanently lower in the medium run. C)The effects of this devaluation on the real exchange rate will be ambiguous in the medium run. D)The real exchange rate will be unchanged in the medium run. To view all questions and flashcards with answers, click on the resource link above.

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Chapter 21: Should Policy Makers Be Restrained Available Study Resources on Quizplus for this Chatper 65 Verified Questions 65 Flashcards Source URL: https://quizplus.com/quiz/26606

Sample Questions Q1) Suppose a government have a stated policy that it will not negotiate with hostage takers.Now someone is taken hostage,what would be the best policy for the government? Explain. Q2) The Masstricht treaty set the budget ratio to GDP to be ________ in order for countries to qualify to join the Euro area. A)below 3% B)below 4% C)below 5% D)below 6% Q3) The idea that the economy operates like a complicated,predictable machine is an important aspect of A)game theory. B)attrition theory. C)the theory of strategic interaction. D)time inconsistency theory. E) optimal control theory. Q4) Assume a country has presidential elections every three years.If a political business cycle exists in this country,explain any differences in the average annual growth rates of output for each year of a typical administration. To view all questions and flashcards with answers, click on the resource link above. Page 23

Chapter 22: Fiscal Policy: a Summing up Available Study Resources on Quizplus for this Chatper 79 Verified Questions 79 Flashcards Source URL: https://quizplus.com/quiz/26607

Sample Questions Q1) In the medium run,a tax increase that causes a reduction in the budget deficit will A)affect only the price level. B)not affect the price level but will alter the composition of output. C)not affect the level of output, but will affect the composition of output. D)affect both the level and composition of output. Q2) Hyperinflation refers to inflation in excess of ________ per month. A)30% B)10% C)20% D)25% Q3) Suppose the central bank decreases the rate of growth of the money supply.What effect will this decrease in money growth have on seignorage in: (1)the short run; and (2)the medium run? Explain. Q4) Given nominal money growth,the amount of seignorage will be greater when A)tax revenues are higher. B)real money balances are larger. C)the inflation rate is higher. D)foreign lending is higher. E) none of the above To view all questions and flashcards with answers, click on the resource link above. Page 24

Chapter 23: Monetary Policy: a Summing up Available Study Resources on Quizplus for this Chatper 71 Verified Questions 71 Flashcards Source URL: https://quizplus.com/quiz/26608

Sample Questions Q1) The maximum number of individuals a U.S.president can appoint to the Board of governors is A)15. B)12. C)7. D)4 . E) none of the above Q2) An economy is said to be in the liquidity trap when the short-term ________ is down to zero. A)real interest rate on corporate bonds B)nominal interest rate on government bonds C)nominal interest rate on corporate bonds D)real interest rate on government bonds Q3) Since the 1980s,"NOW" accounts have been included in A)M1, but not M2. B)M2, but not M1. C)both M1 and M2. D)the monetary base and M1, but not M2. E) neither M1 nor M2. Q4) What are the factors that will determine the optimal inflation rate? Page 25 To view all questions and flashcards with answers, click on the resource link above.

Chapter 24: Epilogue: the Story of Macroeconomics Available Study Resources on Quizplus for this Chatper 64 Verified Questions 64 Flashcards Source URL: https://quizplus.com/quiz/26609

Sample Questions Q1) The crisis reflects a major intellectual failure of macroeconomics to understand the macroeconomic importance of A)financial system. B)growth. C)unemployment. D)inflation. Q2) Which of the following events led to the crisis in macroeconomics and to the development of rational expectations theory? A)the Great Depression B)the stock market crash of 1987 C)the stock market speculative bubble of the late 1990s D)stagflation in the 1970s E) large budget deficits in the 1980s Q3) Work by Doug Diamond and Philip Dybvig in the 1980s had clarified the nature of A)unemployment. B)bank runs. C)inflation. D)growth. Q4) Discuss what is meant by the neoclassical synthesis and explain how it emerged. Q5) Discuss the major intellectual failure on macroeconomics from the crisis. Page 26 To view all questions and flashcards with answers, click on the resource link above.

Chapter 25: Appendix Available Study Resources on Quizplus for this Chatper 19 Verified Questions 19 Flashcards Source URL: https://quizplus.com/quiz/26611

Sample Questions Q1) A key step in using instrument variable methods is to A)find one or more exogenous variables that influence your dependent variable. B)decrease the number of lags in the regression equation. C)conduct interviews to determine how accurate your data really is. D)run the regression on two different computers to see if the results differ. E) eliminate the dependent variable. Q2) Changes in business inventories will be negative when A)production exceeds sales. B)production is less than sales. C)a trade surplus exists. D)a budget surplus exists. Q3) Suppose exports are less than imports.Given this information,we know with certainty that A)a trade deficit exists. B)GNP > GDP. C)GNP < GDP. D)the change in business inventories is positive. To view all questions and flashcards with answers, click on the resource link above.

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