Question

1. The more or less regular pattern of expansion (recovery) and contraction (recession) in economic activity around the path of trend growth are known as:

Economic Cycles

Business cycles

Price Cycles

Potential Cycles

2. Which of the following economic variables is considered to be fixed in the short-run?

Both prices and wages

Wages

Output

Prices

3. In the long run, the output level which is obtained when capital (K) and labor (L) are employed at the maximum level for a given level of technology is called the:

Real Output

Potential Output

Nominal Output

Actual Output

Answer 1

1. Business cycle - is correct

2. Both prices and wages - is correct

3. Potential output - is correct