Question 1

When a recession occurs,do economists expect it to be a temporary phenomenon? Or is there some degree of permanence? What is the empirical evidence?

Accepted Answer

Recent research suggests that recessions...

Question 2

Research on the effects of recessions on the real level of GDP shows that

Accepted Answer

A)  recessions cause only temporary reductions in real GDP,which are offset by growth during the expansion phase.
B)  recessions cause large,permanent reductions in the real level of GDP.
C)  recessions cause both temporary and permanent declines in real GDP,but most of the decline is temporary.
D)  recessions cause both temporary and permanent declines in real GDP,but most of the decline is permanent.

Question 3

Christina Romer's criticism of the belief that business cycles had moderated since World War II depended on the fact that

Accepted Answer

A)  estimates of the timing of business cycles since World War II had been inaccurate.
B)  misuse of historical data had caused economists to understate the size of cyclical fluctuations in the post-World War II era.
C)  economists had ignored the roles of the government and international trade in mitigating economic fluctuations prior to World War II.
D)  economists had left out important components of GDP,such as wholesale and retail distribution,transportation,and services,in their pre-World War II estimates. D

Question 4

What are the two main components of business cycle theories?

Accepted Answer

A)  A description of shocks and a model of how the economy responds to them
B)  A model of how people decide to spend and a description of the government's role in the economy
C)  A model of how equilibrium is reached and a description of the government's role in the economy
D)  A description of shocks and a description of the government's role in the economy

Question 5

When aggregate economic activity is declining,the economy is said to be in

Accepted Answer

A)  a contraction.
B)  an expansion.
C)  a trough.
D)  a turning point.

Question 6

Wars,new inventions,harvest failures,and changes in government policy are examples of

Accepted Answer

A)  the business cycle.
B)  economic models.
C)  shocks.
D)  opportunity costs.

Question 7

Persistence is

Accepted Answer

A)  the tendency for declines in economic activity to be followed by further declines,and for growth in economic activity to be followed by more growth.
B)  the idea that the standard pattern of contraction-trough-expansion-peak occurs again and again in industrial economies.
C)  the tendency of many economic variables to move together in a predictable way over the business cycle.
D)  the idea that peaks and troughs of the business cycle occur at regular intervals. A

Question 8

Describe the major features of the business cycle.Be sure to discuss what variables are affected by the cycle,a description of the key features that are apparent in the data,how variables are related to one another,how regular the cycle is,and how predictable the cycle is.

Accepted Answer

The business cycle is defined as a fluct...

Question 9

The Great Recession began in ________ and ended in ________.

Accepted Answer

A)  December 2007; June 2009
B)  December 2007; December 2011
C)  October 2008; June 2009
D)  October 2008; December 2011 A

Question 10

Which of the following macroeconomic variables would you exclude from an index of leading economic indicators?

Accepted Answer

A)  Money supply
B)  Industrial production
C)  Inventory investment
D)  Residential investment

Question 11

According to Keynesian macroeconomists,prices adjust ________ to shocks,so the government should ________.

Accepted Answer

A)  slowly; do little
B)  rapidly; do little
C)  rapidly; fight recessions
D)  slowly; fight recessions

Question 12

For each outcome below,tell what type of shift must have taken place in either the aggregate demand curve or the long-run aggregate supply curve.
(a)In the short run,the price level is unchanged and output rises.
(b)In the long run,the price level declines and output is unchanged.
(c)In the long run,the price level rises and output declines.

Accepted Answer

Ms (a)The aggregate demand cur...

Question 13

How has the severity and duration of business cycles changed over time in the United States?

Accepted Answer

Though it is a controversial subject,it ...

Question 14

Comovement is

Accepted Answer

A)  the tendency for declines in economic activity to be followed by further declines,and for growth in economic activity to be followed by more growth.
B)  the idea that the standard pattern of contraction-trough-expansion-peak occurs again and again in industrial economies.
C)  the tendency of many economic variables to move together in a predictable way over the business cycle.
D)  the idea that peaks and troughs of the business cycle occur at regular intervals.

Question 15

The tendency of many economic variables to move together in a predictable way over the business cycle is called

Accepted Answer

A)  recurrence.
B)  persistence.
C)  comovement.
D)  inflation.

Question 16

Which of the following macroeconomic variables could not be used as a leading economic indicator?

Accepted Answer

A)  Residential investment
B)  Employment
C)  The money supply
D)  Stock prices

Question 17

When plotted with the aggregate price level on the vertical axis and output on the horizontal axis,the long-run aggregate supply curve

Accepted Answer

A)  slopes upward.
B)  slopes downward.
C)  is vertical.
D)  is horizontal.

Question 18

The CFNAI is a

Accepted Answer

A)  leading index based on variables released with different frequencies.
B)  coincident index based on variables released with different frequencies.
C)  leading index based on 85 monthly variables.
D)  coincident index based on 85 monthly variables.

Question 19

The AD,SRAS,and LRAS curves each show a relationship between which two economic variables?

Accepted Answer

A)  The aggregate price level and output
B)  The aggregate price level and the interest rate
C)  Output and unemployment
D)  Output and the interest rate

Question 20

A variable that tends to move in advance of aggregate economic activity is called

Accepted Answer

A)  a leading variable.
B)  a coincident variable.
C)  a lagging variable.
D)  an acyclical variable.

Exam 8: Business Cycles

When a recession occurs,do economists expect it to be a temporary phenomenon? Or is there some degree of permanence? What is the empirical evidence?

Correct Answer
verified
Recent research suggests that recessions...
View Answer

Research on the effects of recessions on the real level of GDP shows that

Correct Answer
verified

Christina Romer's criticism of the belief that business cycles had moderated since World War II depended on the fact that

Correct Answer
verified
D

What are the two main components of business cycle theories?

Correct Answer
verified

When aggregate economic activity is declining,the economy is said to be in

Correct Answer
verified

Wars,new inventions,harvest failures,and changes in government policy are examples of

Correct Answer
verified

Persistence is

Correct Answer
verified
A

Describe the major features of the business cycle.Be sure to discuss what variables are affected by the cycle,a description of the key features that are apparent in the data,how variables are related to one another,how regular the cycle is,and how predictable the cycle is.

Correct Answer
verified
The business cycle is defined as a fluct...
View Answer

The Great Recession began in and ended in .

Correct Answer
verified
A

Which of the following macroeconomic variables would you exclude from an index of leading economic indicators?

Correct Answer
verified

According to Keynesian macroeconomists,prices adjust to shocks,so the government should .

Correct Answer
verified

Correct Answer
verified
Ms (a)The aggregate demand cur...
View Answer

How has the severity and duration of business cycles changed over time in the United States?

Correct Answer
verified
Though it is a controversial subject,it ...
View Answer

Comovement is

Correct Answer
verified

The tendency of many economic variables to move together in a predictable way over the business cycle is called

Correct Answer
verified

Which of the following macroeconomic variables could not be used as a leading economic indicator?

Correct Answer
verified

When plotted with the aggregate price level on the vertical axis and output on the horizontal axis,the long-run aggregate supply curve

Correct Answer
verified

The CFNAI is a

Correct Answer
verified

The AD,SRAS,and LRAS curves each show a relationship between which two economic variables?

Correct Answer
verified

A variable that tends to move in advance of aggregate economic activity is called

Correct Answer
verified

Exam 8: Business Cycles

When a recession occurs,do economists expect it to be a temporary phenomenon? Or is there some degree of permanence? What is the empirical evidence?

Correct AnswerverifiedRecent research suggests that recessions...View AnswerShow Answer

Research on the effects of recessions on the real level of GDP shows that

Correct AnswerverifiedShow Answer

Christina Romer's criticism of the belief that business cycles had moderated since World War II depended on the fact that

Correct AnswerverifiedD

What are the two main components of business cycle theories?

Correct AnswerverifiedShow Answer

When aggregate economic activity is declining,the economy is said to be in

Correct AnswerverifiedShow Answer

Wars,new inventions,harvest failures,and changes in government policy are examples of

Correct AnswerverifiedShow Answer

Persistence is

Correct AnswerverifiedA

Describe the major features of the business cycle.Be sure to discuss what variables are affected by the cycle,a description of the key features that are apparent in the data,how variables are related to one another,how regular the cycle is,and how predictable the cycle is.

Correct AnswerverifiedThe business cycle is defined as a fluct...View AnswerShow Answer

The Great Recession began in ________ and ended in ________.

Correct AnswerverifiedA

Which of the following macroeconomic variables would you exclude from an index of leading economic indicators?

Correct AnswerverifiedShow Answer

According to Keynesian macroeconomists,prices adjust ________ to shocks,so the government should ________.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedMs (a)The aggregate demand cur...View AnswerShow Answer

How has the severity and duration of business cycles changed over time in the United States?

Correct AnswerverifiedThough it is a controversial subject,it ...View AnswerShow Answer

Comovement is

Correct AnswerverifiedShow Answer

The tendency of many economic variables to move together in a predictable way over the business cycle is called

Correct AnswerverifiedShow Answer

Which of the following macroeconomic variables could not be used as a leading economic indicator?

Correct AnswerverifiedShow Answer

When plotted with the aggregate price level on the vertical axis and output on the horizontal axis,the long-run aggregate supply curve

Correct AnswerverifiedShow Answer

The CFNAI is a

Correct AnswerverifiedShow Answer

The AD,SRAS,and LRAS curves each show a relationship between which two economic variables?

Correct AnswerverifiedShow Answer

A variable that tends to move in advance of aggregate economic activity is called

Correct AnswerverifiedShow Answer

Correct Answer
verified
Recent research suggests that recessions...
View Answer

Correct Answer
verified

Correct Answer
verified
D

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verified
A

Correct Answer
verified
The business cycle is defined as a fluct...
View Answer

The Great Recession began in and ended in .

Correct Answer
verified
A

Correct Answer
verified

According to Keynesian macroeconomists,prices adjust to shocks,so the government should .

Correct Answer
verified

Correct Answer
verified
Ms (a)The aggregate demand cur...
View Answer

Correct Answer
verified
Though it is a controversial subject,it ...
View Answer

Correct Answer
verified

Correct Answer
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