Question 1

Which of the following is true?

Accepted Answer

A)  Employment and unemployment are both coincident with the business cycle.
B)  Employment and unemployment are both procyclical.
C)  Employment is procyclical and unemployment is coincident with the business cycle.
D)  Employment is procyclical and unemployment is countercyclical.E) A) and D)
F) None of the above

Question 2

In the long run,an increase in government purchases of military equipment would cause output to ________ and the aggregate price level to ________.

Accepted Answer

A)  stay constant; fall
B)  fall; fall
C)  fall; stay constant
D)  stay constant; riseE) C) and D)
F) B) and C)

Question 3

The NBER's Business Cycle Dating Committee picks recession dates by looking at many variables,the four most important of which are industrial production,manufacturing and trade sales,nonfarm employment,and real personal income.These variables are known as

Accepted Answer

A)  leading indicators.
B)  coincident indicators.
C)  lagging indicators.
D)  recession indicators.E) A) and C)
F) A) and D)

Question 4

Which of the following macroeconomic variables is procyclical and coincident with the business cycle?

Accepted Answer

A)  Residential investment
B)  Nominal interest rates
C)  Industrial production
D)  UnemploymentE) B) and D)
F) B) and C)

Question 5

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.E) C) and D)
F) A) and B)

Question 6

Business cycles all display the following characteristics except

Accepted Answer

A)  a period of expansion followed by one of contraction.
B)  comovement of many economic variables.
C)  rising prices during an expansion and falling prices during the contraction.
D)  they last a period of one to twelve years.E) C) and D)
F) None of the above

Question 7

Industries that are extremely sensitive to the business cycle are the

Accepted Answer

A)  durable goods and service sectors.
B)  nondurable goods and service sectors.
C)  capital goods and nondurable goods sectors.
D)  capital goods and durable goods sectors.E) A) and D)
F) A) and C)

Question 8

You want to invest in a firm whose profits show large fluctuations throughout the business cycle.Which of the following would you invest in?

Accepted Answer

A)  A corporation that depends heavily on business fixed investment
B)  A corporation that depends heavily on consumer services
C)  A corporation that depends heavily on consumer nondurables
D)  A corporation that depends heavily on government purchasesE) B) and C)
F) None of the above

Question 9

Which of the following macroeconomic variables does not vary much over the seasons?

Accepted Answer

A)  The nominal money stock
B)  The unemployment rate
C)  The real wage
D)  Average labor productivityE) None of the above
F) C) and D)

Question 10

Identify the comovement (i.e.,direction and timing)of the following variables over a business cycle: (a)industrial production; (b)unemployment; (c)nominal interest rates; (d)nominal money supply growth; and (e)investment.

Accepted Answer

(a)Industrial production is a procyclica...

Question 11

You want to invest in a firm whose profits show small fluctuations throughout the business cycle.Which of the following would you invest in?

Accepted Answer

A)  A corporation that depends heavily on business fixed investment
B)  A corporation that depends heavily on residential investment
C)  A corporation that depends heavily on consumer nondurables
D)  A corporation that depends heavily on consumer durablesE) None of the above
F) A) and B)

Question 12

Stock and Watson found that ________ was responsible for about 20-30 % of the reduction in output volatility that occurred in the mid-1980s.

Accepted Answer

A)  reduced shocks to productivity
B)  reduced shocks to food and commodity prices
C)  better monetary policy
D)  better inventory controlE) A) and B)
F) A) and C)

Question 13

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.E) A) and B)
F) B) and C)

Question 14

The fact that business cycles are recurrent but not periodic means that

Accepted Answer

A)  business cycles occur at predictable intervals, but do not last a predetermined length of time.
B)  the business cycle's standard contraction-trough-expansion-peak pattern has been observed to occur over and over again, but not at predictable intervals.
C)  business cycles occur at predictable intervals, but do not all follow a standard contraction-trough-expansion-peak pattern.
D)  business cycles last a predetermined length of time, but do not all follow a standard contraction-trough-expansion-peak pattern.E) B) and D)
F) C) and D)

Question 15

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

(a)The aggregate demand curve ...

Question 16

Which of the following macroeconomic variables is procyclical and lags the business cycle?

Accepted Answer

A)  Business fixed investment
B)  Employment
C)  Stock prices
D)  Nominal interest ratesE) B) and C)
F) A) and D)

Question 17

The widespread decline in the volatility of many macroeconomic variables after 1984 led economists to term this period the

Accepted Answer

A)  Great Moderation.
B)  Low Volatility Era.
C)  Steady State.
D)  Long Boom.E) B) and C)
F) A) and B)

Question 18

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 pricesE) B) and D)
F) B) and C)

Question 19

The probability that an employed worker will lose his or her job in the next month is known as

Accepted Answer

A)  the unemployment rate.
B)  the job finding rate.
C)  the underemployment rate.
D)  the job loss rate.E) B) and D)
F) None of the above

Question 20

Define the following characteristics of business cycles: recurrence and persistence.

Accepted Answer

Business cycles exhibit recurrence and p...

Exam 8: Business Cycles

Define the following characteristics of business cycles: recurrence and persistence.

Correct Answer
verified
Business cycles exhibit recurrence and p...
View Answer

Business cycles all display the following characteristics except

Correct Answer
verified

Identify the comovement (i.e.,direction and timing)of the following variables over a business cycle: (a)industrial production; (b)unemployment; (c)nominal interest rates; (d)nominal money supply growth; and (e)investment.

Correct Answer
verified
(a)Industrial production is a procyclica...
View Answer

Which of the following macroeconomic variables is procyclical and coincident with the business cycle?

Correct Answer
verified

Stock and Watson found that ________ was responsible for about 20-30 % of the reduction in output volatility that occurred in the mid-1980s.

Correct Answer
verified

Correct Answer
verified
(a)The aggregate demand curve ...
View Answer

Which of the following is true?

Correct Answer
verified

You want to invest in a firm whose profits show large fluctuations throughout the business cycle.Which of the following would you invest in?

Correct Answer
verified

Which of the following macroeconomic variables is procyclical and lags the business cycle?

Correct Answer
verified

The widespread decline in the volatility of many macroeconomic variables after 1984 led economists to term this period the

Correct Answer
verified

The fact that business cycles are recurrent but not periodic means that

Correct Answer
verified

The probability that an employed worker will lose his or her job in the next month is known as

Correct Answer
verified

You want to invest in a firm whose profits show small fluctuations throughout the business cycle.Which of the following would you invest in?

Correct Answer
verified

Industries that are extremely sensitive to the business cycle are the

Correct Answer
verified

In the long run,an increase in government purchases of military equipment would cause output to and the aggregate price level to .

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

The NBER's Business Cycle Dating Committee picks recession dates by looking at many variables,the four most important of which are industrial production,manufacturing and trade sales,nonfarm employment,and real personal income.These variables are known as

Correct Answer
verified

Which of the following macroeconomic variables does not vary much over the seasons?

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Exam 8: Business Cycles

Define the following characteristics of business cycles: recurrence and persistence.

Correct AnswerverifiedBusiness cycles exhibit recurrence and p...View AnswerShow Answer

Business cycles all display the following characteristics except

Correct AnswerverifiedShow Answer

Identify the comovement (i.e.,direction and timing)of the following variables over a business cycle: (a)industrial production; (b)unemployment; (c)nominal interest rates; (d)nominal money supply growth; and (e)investment.

Correct Answerverified(a)Industrial production is a procyclica...View AnswerShow Answer

Which of the following macroeconomic variables is procyclical and coincident with the business cycle?

Correct AnswerverifiedShow Answer

Stock and Watson found that ________ was responsible for about 20-30 % of the reduction in output volatility that occurred in the mid-1980s.

Correct AnswerverifiedShow Answer

Correct Answerverified(a)The aggregate demand curve ...View AnswerShow Answer

Which of the following is true?

Correct AnswerverifiedShow Answer

You want to invest in a firm whose profits show large fluctuations throughout the business cycle.Which of the following would you invest in?

Correct AnswerverifiedShow Answer

Which of the following macroeconomic variables is procyclical and lags the business cycle?

Correct AnswerverifiedShow Answer

The widespread decline in the volatility of many macroeconomic variables after 1984 led economists to term this period the

Correct AnswerverifiedShow Answer

The fact that business cycles are recurrent but not periodic means that

Correct AnswerverifiedShow Answer

The probability that an employed worker will lose his or her job in the next month is known as

Correct AnswerverifiedShow Answer

You want to invest in a firm whose profits show small fluctuations throughout the business cycle.Which of the following would you invest in?

Correct AnswerverifiedShow Answer

Industries that are extremely sensitive to the business cycle are the

Correct AnswerverifiedShow Answer

In the long run,an increase in government purchases of military equipment would cause output to ________ and the aggregate price level to ________.

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 AnswerverifiedShow Answer

The NBER's Business Cycle Dating Committee picks recession dates by looking at many variables,the four most important of which are industrial production,manufacturing and trade sales,nonfarm employment,and real personal income.These variables are known as

Correct AnswerverifiedShow Answer

Which of the following macroeconomic variables does not vary much over the seasons?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
verified
Business cycles exhibit recurrence and p...
View Answer

Correct Answer
verified

Correct Answer
verified
(a)Industrial production is a procyclica...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
(a)The aggregate demand curve ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

In the long run,an increase in government purchases of military equipment would cause output to and the aggregate price level to .

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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