Question 1

Forecasting the future path of real GDP by exploiting past statistical relationships

Accepted Answer

A)  is never very reliable. 
B)  can be accomplished by the construction and use of an index of leading variables. 
C)  can be accomplished by the construction and use of an index of lagging variables. 
D)  can be accomplished by the construction and use of an index of coincident variables. 
E)  can only be accomplished if there is a perfectly positive correlation. 
A)  is never very reliable. 
B)  can be accomplished by the construction and use of an index of leading variables. 
C)  can be accomplished by the construction and use of an index of lagging variables. 
D)  can be accomplished by the construction and use of an index of coincident variables. 
E)  can only be accomplished if there is a perfectly positive correlation.

Question 2

Robert Lucas has popularized the notion that with respect to

Accepted Answer

A)  severity, business cycles are all alike. 
B)  causation, business cycles are all alike. 
C)  quantitative behaviour of comovements among series, business cycles are all alike. 
D)  qualitative behaviour of comovements among series, business cycles are all alike. 
E)  deviations from trend real GDP, business cycles over time are all alike. 
A)  severity, business cycles are all alike. 
B)  causation, business cycles are all alike. 
C)  quantitative behaviour of comovements among series, business cycles are all alike. 
D)  qualitative behaviour of comovements among series, business cycles are all alike. 
E)  deviations from trend real GDP, business cycles over time are all alike.

Question 3

If deviations from trend in a macroeconomic variable are negatively correlated with deviations from trend in real GDP, that variable is said to be

Accepted Answer

A)  useless in predicting future movements in real GDP. 
B)  procyclical. 
C)  countercyclical. 
D)  acyclical. 
E)  uncorrelated. 
A)  useless in predicting future movements in real GDP. 
B)  procyclical. 
C)  countercyclical. 
D)  acyclical. 
E)  uncorrelated.

Question 4

If the correlation coefficient between x and y is equal to 1, we say that x and y are

Accepted Answer

A)  perfectly positively correlated. 
B)  acyclical. 
C)  perfectly negatively correlated. 
D)  leading variables. 
E)  lagging variables. 
A)  perfectly positively correlated. 
B)  acyclical. 
C)  perfectly negatively correlated. 
D)  leading variables. 
E)  lagging variables.

Question 5

One example of a Phillips Curve would be a

Accepted Answer

A)  positive relationship between deviations from trend in real and nominal interest rates. 
B)  negative relationship between deviations from trend in real and nominal interest rates. 
C)  positive relationship between deviations from trend in the level of a money price (the wage rate) prices and the level of aggregate economic activity. 
D)  negative relationship between deviations from trend in the level of prices and the level of aggregate economic activity. 
E)  positive relationship between deviations from trend in the level of prices and the level of aggregate economic activity. 
A)  positive relationship between deviations from trend in real and nominal interest rates. 
B)  negative relationship between deviations from trend in real and nominal interest rates. 
C)  positive relationship between deviations from trend in the level of a money price (the wage rate) prices and the level of aggregate economic activity. 
D)  negative relationship between deviations from trend in the level of prices and the level of aggregate economic activity. 
E)  positive relationship between deviations from trend in the level of prices and the level of aggregate economic activity.

Question 6

If the deviations from trend in a macroeconomic variable is neither procyclical not countercyclical, it is

Accepted Answer

A)  positively correlated. 
B)  a correlation coefficient. 
C)  lagging. 
D)  coincident. 
E)  acyclical. 
A)  positively correlated. 
B)  a correlation coefficient. 
C)  lagging. 
D)  coincident. 
E)  acyclical.

Question 7

Investment tends to be a(n)

Accepted Answer

A)  procyclical variable. 
B)  coincident variable. 
C)  acyclical variable. 
D)  lagging variable. 
E)  leading variable. 
A)  procyclical variable. 
B)  coincident variable. 
C)  acyclical variable. 
D)  lagging variable. 
E)  leading variable.

Question 8

Real consumption tends to be

Accepted Answer

A)  procyclical and less variable than real GDP. 
B)  procyclical and more variable than real GDP. 
C)  countercyclical and less variable than real GDP. 
D)  countercyclical and more variable than real GDP. 
E)  acyclical with real GDP. 
A)  procyclical and less variable than real GDP. 
B)  procyclical and more variable than real GDP. 
C)  countercyclical and less variable than real GDP. 
D)  countercyclical and more variable than real GDP. 
E)  acyclical with real GDP.

Question 9

A reverse Phillips Curve would consist of a

Accepted Answer

A)  positive relationship between deviations from trend in real and nominal interest rates. 
B)  negative relationship between deviations from trend in real and nominal interest rates. 
C)  positive relationship between deviations from trend in the level of prices and the level of aggregate economic activity. 
D)  negative relationship between deviations from trend in the level of prices and the level of aggregate economic activity. 
E)  relationship between lagging and leading indicators. 
A)  positive relationship between deviations from trend in real and nominal interest rates. 
B)  negative relationship between deviations from trend in real and nominal interest rates. 
C)  positive relationship between deviations from trend in the level of prices and the level of aggregate economic activity. 
D)  negative relationship between deviations from trend in the level of prices and the level of aggregate economic activity. 
E)  relationship between lagging and leading indicators.

Question 10

Employment is

Accepted Answer

A)  less variable than real GDP. 
B)  about as variable as real investment. 
C)  more variable than real GDP. 
D)  much more variable than consumption. 
E)  acyclical. 
A)  less variable than real GDP. 
B)  about as variable as real investment. 
C)  more variable than real GDP. 
D)  much more variable than consumption. 
E)  acyclical.

Question 11

For the period 1961-2015 in Canada, the price level was

Accepted Answer

A)  countercyclical. 
B)  bicyclical. 
C)  procyclical. 
D)  acyclical. 
E)  leading. 
A)  countercyclical. 
B)  bicyclical. 
C)  procyclical. 
D)  acyclical. 
E)  leading.

Question 12

If the correlation between GDP and y is -0.75, we say y is

Accepted Answer

A)  procyclical. 
B)  acyclical. 
C)  positively correlated. 
D)  countercyclical. 
E)  persistent. 
A)  procyclical. 
B)  acyclical. 
C)  positively correlated. 
D)  countercyclical. 
E)  persistent.

Question 13

Average labour productivity

Accepted Answer

A)  is a leading economic variable. 
B)  is a lagging economic variable. 
C)  is more variable than real GDP. 
D)  is about as variable as investment. 
E)  is procyclical. 
A)  is a leading economic variable. 
B)  is a lagging economic variable. 
C)  is more variable than real GDP. 
D)  is about as variable as investment. 
E)  is procyclical.

Question 14

Comovement relates to

Accepted Answer

A)  the relationship between real and nominal interest rates. 
B)  the movement between price levels and real GDP over time. 
C)  macroeconomic variables fluctuating together in patterns that exhibit strong regularities. 
D)  the movement of business cycles over time. 
E)  the frequency of the business cycles. 
A)  the relationship between real and nominal interest rates. 
B)  the movement between price levels and real GDP over time. 
C)  macroeconomic variables fluctuating together in patterns that exhibit strong regularities. 
D)  the movement of business cycles over time. 
E)  the frequency of the business cycles.

Question 15

In the 1961-2015 Canadian data, the inflation rate is

Accepted Answer

A)  procyclical. 
B)  acyclical. 
C)  negatively correlated with real GDP. 
D)  indicative of a reverse Phillips curve. 
E)  countercyclical. 
A)  procyclical. 
B)  acyclical. 
C)  negatively correlated with real GDP. 
D)  indicative of a reverse Phillips curve. 
E)  countercyclical.

Question 16

Average labour productivity tends to be

Accepted Answer

A)  procyclical and less variable than real GDP. 
B)  procyclical and more variable than real GDP. 
C)  countercyclical and less variable than real GDP. 
D)  countercyclical and more variable than real GDP. 
E)  acyclical with real GDP. 
A)  procyclical and less variable than real GDP. 
B)  procyclical and more variable than real GDP. 
C)  countercyclical and less variable than real GDP. 
D)  countercyclical and more variable than real GDP. 
E)  acyclical with real GDP.

Question 17

Negative correlation between x and y implies that

Accepted Answer

A)  when x is high, y is high. 
B)  when x is high, y is low. 
C)  xy < 0. 
D)  x/y < 0. 
E)  the trend is unpredictable. 
A)  when x is high, y is high. 
B)  when x is high, y is low. 
C)  xy < 0. 
D)  x/y < 0. 
E)  the trend is unpredictable.

Question 18

Phillips curves are

Accepted Answer

A)  easy to find in the data, and stable. 
B)  hard to find in the data and stable. 
C)  easy to find in the data and unstable. 
D)  obvious from the data. 
E)  hard to find in the data and unstable. 
A)  easy to find in the data, and stable. 
B)  hard to find in the data and stable. 
C)  easy to find in the data and unstable. 
D)  obvious from the data. 
E)  hard to find in the data and unstable.

Question 19

Business cycle persistence refers to the property that

Accepted Answer

A)  real GDP is rarely exactly at trend. 
B)  booms and recessions last a long time. 
C)  when real GDP is above trend, it tends to stay above trend, and when it is below trend, it tends to stay below trend. 
D)  business cycles are persistently hard to predict. 
E)  real GDP tends to stay in the peaks and troughs of the business cycle. 
A)  real GDP is rarely exactly at trend. 
B)  booms and recessions last a long time. 
C)  when real GDP is above trend, it tends to stay above trend, and when it is below trend, it tends to stay below trend. 
D)  business cycles are persistently hard to predict. 
E)  real GDP tends to stay in the peaks and troughs of the business cycle.

Forecasting the future path of real GDP by exploiting past statistical relationships

Robert Lucas has popularized the notion that with respect to

If deviations from trend in a macroeconomic variable are negatively correlated with deviations from trend in real GDP, that variable is said to be

If the correlation coefficient between x and y is equal to 1, we say that x and y are

One example of a Phillips Curve would be a

If the deviations from trend in a macroeconomic variable is neither procyclical not countercyclical, it is

Investment tends to be a(n)

Real consumption tends to be

A reverse Phillips Curve would consist of a

Employment is

For the period 1961-2015 in Canada, the price level was

If the correlation between GDP and y is -0.75, we say y is

Average labour productivity

Comovement relates to

In the 1961-2015 Canadian data, the inflation rate is

Average labour productivity tends to be

Negative correlation between x and y implies that

Phillips curves are

Business cycle persistence refers to the property that

Introduction

Measurement

Consumer and Firm Behaviour: The Work–Leisure Decision and Profit Maximization

A Closed-Economy One-Period Macroeconomic Model

Search and Unemployment

Economic Growth: Malthus and Solow

Income Disparity among Countries and Endogenous Growth

A Two-Period Model: The Consumption–Savings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model with Investment

A Monetary Intertemporal Model: Money, Banking, Prices, and Monetary Policy

Business Cycle Models with Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

Inflation: Phillips Curves and Neo-Fisherism

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking: A Deeper Look

Filters

Exam 3: Business Cycle Measurement

Forecasting the future path of real GDP by exploiting past statistical relationships

Robert Lucas has popularized the notion that with respect to

If deviations from trend in a macroeconomic variable are negatively correlated with deviations from trend in real GDP, that variable is said to be

If the correlation coefficient between x and y is equal to 1, we say that x and y are

One example of a Phillips Curve would be a

If the deviations from trend in a macroeconomic variable is neither procyclical not countercyclical, it is

Investment tends to be a(n)

Real consumption tends to be

A reverse Phillips Curve would consist of a

Employment is

For the period 1961-2015 in Canada, the price level was

If the correlation between GDP and y is -0.75, we say y is

Average labour productivity

Comovement relates to

In the 1961-2015 Canadian data, the inflation rate is

Average labour productivity tends to be

Negative correlation between x and y implies that

Phillips curves are

Business cycle persistence refers to the property that

Introduction

Measurement

Consumer and Firm Behaviour: The Work–Leisure Decision and Profit Maximization

A Closed-Economy One-Period Macroeconomic Model

Search and Unemployment

Economic Growth: Malthus and Solow

Income Disparity among Countries and Endogenous Growth

A Two-Period Model: The Consumption–Savings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model with Investment

A Monetary Intertemporal Model: Money, Banking, Prices, and Monetary Policy

Business Cycle Models with Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

Inflation: Phillips Curves and Neo-Fisherism

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking: A Deeper Look

Filters