Question

The regular alternating periods of expansion and contraction in economic activity are called: a. Inflation               ...

The regular alternating periods of expansion and contraction in economic activity are called:

a. Inflation               

b. Macro policy

c. Business cycles

d. Unemployment

What stage of the business cycle immediately follows the peak?

a. peak

b. expansion

c. recession

d. recovery

When inflation ends up being lower than expected,

a. Everyone benefits because nominal interest rates will be lower

b. Everyone benefits because prices do not increase as much as expected

c. Lenders of fixed-rate mortgages generally benefit because they will earn more than expected.

d. Borrowers with fixed-rate mortgages generally benefit because their purchasing power will not decline as much.

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Homework Answers

Answer #1

1) The regular alternating periods of expansion and contraction in economic activity are called BUSINESS CYCLES

Ans is option C

2) A conteraction immediately follows the peak, and recession is business cycle contraction which results in slow down in economic activity.

Ans is option C

3) If actual inflation rate is lower than expected then lenders are benefited as borowers end up paying more than what they should pay in interest.

Ans is option C, Lenders of fixed-rate mortgages generally benefit because they will earn more than expected.

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