Question

Which of the following statements about the business cycle is correct?


Select the best answer from the choices provided.
Economies expand for about a decade and then contract for about five years.
Economies contract for about a decade and then expand for about five years.
Busts and booms are independent of political decisions.
Certain financial actions are more profitable in busts and others more profitable in booms

Answer 1

@zynell

Answer 2

@phi

Answer 3

I never studied this. Strictly speaking it is not math

Answer 4

The economic is largely stochastic and its difficult to put in specific growth to contraction periods. The only one that is 100% true is the last statement. Certain Financial actions are more profitable in busts and others more profitable in booms.

Answer 5

he U.S. income tax is an example of _____.


Select the best answer from the choices provided.
regressive taxation
progressive taxatio

Answer 6

@sylbot

Answer 7

*the

Answer 8

The US has a progressive income tax system. As you go up in brackets, you have to pay a larger fraction, i.e. the marginal fraction is greater than the average fraction.

Answer 9

omg thank you.!!!

Answer 10

Select the best answer from the choices provided.
The government increases spending on public works to create jobs.
The government increases inflation to encourage lending and business expansion.
The government reduces taxes to encourage consumption.
The government bans COLAs.

Answer 11

@sylbot

Answer 12

what is a COLA?

Answer 13

cost-of-living adjustment (COLA) Formula used to adjust salaries and some retirement payments to match price increases from inflation

Answer 14

ok what is the question? it just says select the best answer, do you mean the most true statement?

Answer 15

yes

Answer 16

Linus's retirement funds are largely invested in traditional bonds. Which economic policy would be most risky for him?


Select the best answer from the choices provided.
The government increases spending on public works to create jobs.
The government increases inflation to encourage lending and business expansion.
The government reduces taxes to encourage consumption.
The government bans COLAs.

Answer 17

soz about that

Answer 18

Ive narrowed it down to two choices, either B or D. The reason I can't decided is I'm not sure if the fund will be given as a stated value (so they will give him a certain amount, but they have a separate fund manager) or if he himself has invested. My best guess is B because traditionally, bonds are not protected against inflation, being a debt (as opposed to equity) (UNLESS they are TIPS haha but I don't think thats part of your question).

Answer 19

its B

Answer 20

But I haven't learned about COLAs so not completely sure.

Answer 21

yeah thats was my best guess.

Answer 22

When the amount of money in circulation increases without an increase in the number of goods in an economy, the result is called

Answer 23

When the amount of money in circulation increases without an increase in the number of goods in an economy, the result is called _____.


Select the best answer from the choices provided.
regressive taxation
inflation
market timing
progressive taxation

Answer 24

@sylbot

Answer 25

the last answer was D

Answer 26

A COLA gives workers a pay increase to match inflation to maintain their ability to purchase goods.

Answer 27

definitely inflation. Traditionally defined as an increase in the cost of living, this is a perfect example of it. The number of goods (lets say all else equal) are the same so the price is higher.

Answer 28

Investors with assets that have fixed dollar values, like many bonds or certificates of deposit, often lose value to inflation.

Answer 29

without cola they would lose their bonds to inflation

Answer 30

Ah, see I had no idea what COLA was, but yeah I knew that bonds are not protected vs inflation (as I said).

Answer 31

yeh thanks you are super smart

Answer 32

plz keep helping me

Answer 33

2heads are better than 1

Answer 34

Like I didn't know if COLA was applicable to his own case. I didn't know if he invested in bonds himself! or if pension was protected via COLA

Answer 35

so yeahthe last one was 100% inflation, the classic definition.

Answer 36

Yep we make a good team

Answer 37

What currently backs U.S. currency?


Select the best answer from the choices provided.
gold
silver
oil
nothing

Answer 38

nothing. The gold was gone a long time ago.

Answer 39

ay $100 buys less of most goods than it did 10 years ago. This phenomenon is an example of _____.


Select the best answer from the choices provided.
inflation
deflation
a growing GDP
a falling GDP

Answer 40

*today

Answer 41

inflation again. This is exactly how inflation is defined in beginner macro classes.

Answer 42

true

Answer 43

The term inflation refers to _____.


Select the best answer from the choices provided.
the rate at which the economy grows
the amount of money in circulation
the change in value of a certain amount of money
the change in price of one good from one year to the next

Answer 44

D?

Answer 45

LOL is this an inflation hw assignment. The answer is C or D (they are essentially the same) but inflation is measured using a fixed basket of goods (or at least thats what I learned) so I agree with D.

Answer 46

lml im just going over my questions make sure they are right

Answer 47

Inflation does not erode the value of _____.


Select the best answer from the choices provided.
savings accounts
municipal bonds
real estate
loans

Answer 48

oh crap
It says ONE good, I'd change my answer to C

Answer 49

its not D?

Answer 50

I don't think so. Inflation is measured using a fixed basket of goods. So it isn't just ONE good, like D says. I'd say out of the options, C is the best choice.

Answer 51

alright ill check that out mate

Answer 52

Inflation measures the change in value of money over time.

Answer 53

yep you are right

Answer 54

Real estate is generally an excellent hedge against inflation (Barring financial crises that is :P ) because the rising costs can help turn a profit.

Answer 55

ok

Answer 56

Cynthia believes that progressive taxes are fairest and the tax code should be made more progressive. Which of the following candidates should she vote for in upcoming elections if taxes are her only concern?


Select the best answer from the choices provided.
Bob, who wants to replace proportional property taxes with a flat fee
Victor, who wants to tax each person $500 to pay for universal healthcare
Susan, who wants to give a tax credit to the working poor
Jorge, who wants to eliminate the sales tax

Answer 57

loans are weird, if you GIVE out a loan you definitely lose money due to inflation, but if you TAKE a loan it depends on how you spend it. Generally speaking people spend it immediately but its a bit faulty to say its a good hedge against inflation. Real estate is a much better choice.

Answer 58

real estate is the answer mate

Answer 59

thats the answer you are right

Answer 60

Cynthia believes that progressive taxes are fairest and the tax code should be made more progressive. Which of the following candidates should she vote for in upcoming elections if taxes are her only concern?


Select the best answer from the choices provided.
Bob, who wants to replace proportional property taxes with a flat fee
Victor, who wants to tax each person $500 to pay for universal healthcare
Susan, who wants to give a tax credit to the working poor
Jorge, who wants to eliminate the sales tax

Answer 61

Susan is most progressive. The rest all either help everyone an equal amount or hurt everyone an equal amount (in terms of income).

Answer 62

okay tyty

Answer 63

Barry is running for mayor and wishes to revamp his city's tax code to make it simpler and more progressive. Which of the following statements is compatible with Barry's plans?


Select the best answer from the choices provided.
Barry should decrease the taxes on property and increase the taxes on cigarettes.
Barry should decrease the taxes on cigarettes and increase the taxes on income earned by the wealthy.
Barry should increase the sales tax and decrease the taxes on property.
Barry should decrease the income tax and increase the sales tax.

Answer 64

@sylbot

Answer 65

@sylbot B?

Answer 66

Yeah B is the answer.

Answer 67

Michelle is buying a house and the Fed has announced that it has lowered its interest rates to an unusually low 0.5%. What type of mortgage best takes advantage of the economic situation?


Select the best answer from the choices provided.
fixed-rate mortgage
adjustable-rate mortgage
interest-only mortgage
reverse mortgage

Answer 68

@sylbot

Answer 69

fixed rate.

Answer 70

lonso reads that interest rates are climbing higher. Which of the following statements is most likely also true?


Select the best answer from the choices provided.
Unemployment levels have been climbing and prices have been falling.
Unemployment levels have been climbing and wages have been rising.
Both stock prices and wages have been climbing.
Prices have been falling, but other indexes have stayed the same.

Answer 71

@sylbot

Answer 72

@sylbot

Answer 73

@zynell

Answer 74

Rising interest is linked to falling investment. This means less economic growth (GDP wise). Unemployment would increase and prices would fall.

Answer 75

@sylbot which one is it?

Answer 76

first one.

Answer 77

Investors with assets that have fixed dollar values, like many bonds or certificates of deposit, often lose value to inflation.

Answer 78

John reads that the Fed has recently begun increasing its interest rates. Which of the following investments would lose value most quickly afterward?


Select the best answer from the choices provided.
a mutual fund
stocks
bonds
real estate

Answer 79

bonds?

Answer 80

Definitely not real estate haha we just said that was an excellent hedge against inflation. Bonds is correct. Those are fixed value debts. Everything else is either equity or invests (generally) in equity.

Answer 81

thanks a lot you deserve so much hugs

Answer 82

yup, I'm actually an Econ/Math double major so its no problem.

Answer 83

Susan would like to buy a house in the near future using the money she will inherit from her grandfather to make the down payment on a loan. Which of the following policies would hurt her the most?


Select the best answer from the choices provided.
The government increases sales tax to balance the budget.
The Fed increases interest rates to slow down a boom.
The government replaces a property tax with a capitation tax.
The Fed decreases interest rates to stop a bust.

Answer 84

@sylbot

Answer 85

D hurts the most, because she will have to pay much more money to borrow money.

Answer 86

@sylbot

Answer 87

OOOPS increases interest sorry i meant B

Answer 88

yeh i got that B

Answer 89

Brian supports progressive taxation. Which of the following arguments about a carbon tax would most likely lead him to support a carbon tax?


Select the best answer from the choices provided.
The poor spend more of their income on goods and services that require high carbon emissions.
Because carbon taxes will encourage businesses to move overseas, a carbon tax would reward the wealthy.
If the carbon tax had a tax credit, poor people would spend proportionally less income on it.
Because a carbon tax would reward those best able to invest in low carbon technologies, it could be progressive.

Answer 90

the third one is correct

Answer 91

Jim is considering going back to school for an additional degree if the job market is bad. Which of the following actions is consistent with Jim's plan?


Select the best answer from the choices provided.
The economy is in a recession, so Jim goes back to school.
The economy is expanding, so Jim goes back to school.
The economy is contracting, so Jim does not go back to school.
The economy is booming, so Jim goes back to school.

Answer 92

@sylbot

Answer 93

@zynell

Answer 94

Have you studied the Phillips Curve? It relates the inverse relationship between inflation and unemployment. In addition you can link more inflation to expansion and less inflation to contraction (via Keynsian Cross diagram). Given these tools, if the economy is booming, there is more inflation and less unemployment. If the economy is contracting there is less inflation and more unemployment. Boom=don't go to school. Bust=Go to school. The only acceptable answer is A.

Answer 95

no i never studied this.. this is what my school gave me

Answer 96

@sylbot Thank you i passed i got 84