Explanation

• Acceleration is not typically considered a part of the business cycle.
• The parts of the business cycle are usually identified as expansion (or boom), peak, recession (or slump), trough, and recovery.
  

Explanation

The primary objective of a central bank's monetary policy is achieving price stability and controlling inflation.

Explanation

If the household consumes along the budget constraint where MUx/Px > MUy/Py then assuming normal preferences, we are sure that the household could increase its total utility by consuming more of X and less of Y.

Explanation

• According to the classical money theory, money is purely nominal. That is, changes in money supply will have only affect the price levels, but not the real output. Specifically, according to the quantity theory of money, we have:
• real output * price level = money supply * money velocity
• Holding money velocity constant, a reduction in money supply will reduce the price level proportionately, but has no effect on real output.
• Quantity Theory of Money: The quantity theory of money states that the product of real output and price level is equal to the product of money supply and money velocity. This theory is based on a simple equilibrium condition for the money market.

Explanation

If demand function for good X is given by X^D = 1500-1.3P,-1.8P + 2M then we know that goods X and Y are complements to each other.

Explanation

Gross Domestic Product (GDP) is the most commonly used measure of economic activity in a country.

It reflecting the total value of goods and services produced within its borders.

It helps assess the economic health and growth of a nation.

Explanation

• To find the marginal cost (MC), you need to take the derivative of the cost function with respect to quantity (Q).
• Given cost function: C(Q) = 2Q^2 + 10Q + 50

Take the derivative of C(Q) with respect to Q:

• MC(Q) = dC/dd = 4Q + 10

Now, plug in the value Q = 5:

• MC(5) = 4(5) + 10 = 20 + 10 = $30.

Explanation

When both the demand and supply curves shift to the right due to any reason, the quantity traded increases for sure, but nothing specific can be said about prices.

Explanation

To find consumption spending, we can use the GDP formula:

• GDP = Consumption (C) + Investment (I) + Government Spending (G) + Net Exports (NX)

Given:

• GDP = $100 billion
• Government Spending (G) = $20 billion
• Investment (I) = $10 billion
• Net Exports (NX) = -$5 billion (negative because it's an import)

We rearrange the formula to solve for consumption:

• Consumption (C) = GDP - (Investment + Government Spending + Net Exports)
• Substituting the given values:
• Consumption (C) = $100 billion - ($10 billion + $20 billion - $5 billion)
• = $100 billion - $25 billion = $75 billion.

Explanation