Ex. 15. Say if the sentences are true or false. Correct the false ones

1. Internal events are those outside the economic system.

2. When investment decreases the economy enters a period of expansion and boom.

3. Changes in population affect the demand for goods and services.

4. Investment in capital goods like plants, tools and equipment, creates additional jobs, but it

doesn’t increase consumer purchasing power.

5. No economists tried to explain the nature of business cycles.

6. Governmental policies can give the business cycle an upward or downward nudge.

7. Economists describe government’s ability to tax and spend as its monetary policy, and its

ability to regulate the supply of money and credit as its fiscal policy.

8. When consumer spending is on the increase, business firms hire additional help and increase

their level of production.

Ex. 16. Finish the sentences.

1. External factors which affect the economy are:...

2. Internal causes of fluctuations are factors which have to do with...

3. For many years economists struggle to find a theory...

4. Internal events are those...

5. Business firms try to provide consumers with...

6. Governmental policies can give the business cycle...

7. In explaining business cycle fluctuations, today’s economists often distinguish between...

8. When consumer spending decreases, production is reduced,...