(1)The Composite Index of Leading Indicators Turns Downward for Three

question 164

Multiple Choice

(1) The composite index of leading indicators turns downward for three consecutive months; (2) Economists reach agreement that the economy is moving into a recession; (3) A tax cut is proposed in Parliament; (4) The tax cut is passed by Parliament; (5) Consumption spending begins to rise,aggregate demand increases,and the economy begins to recover.
-Refer to the above information.The operational lag of fiscal policy is reflected in events:

• A) 1 and 2.
• B) 2 and 3.
• C) 3 and 4.
• D) 4 and 5.

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Definitions:

Units of Output

The quantity of product that a company produces in a given period.

Marginal Costs

The increase in total production cost that arises from producing one additional unit of a good or service.

Average Fixed Cost Curve

A graph that shows the fixed costs of production divided by the quantity of output produced, illustrating how these costs dilute over larger production volumes.

U-Shaped

A descriptive term often used in economics and statistics to describe a graph or curve that resembles the shape of the letter "U", indicating a particular kind of relationship or trend.