Question 1

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

Question 2

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 productivity 
A) The nominal money stock 
B) The unemployment rate 
C) The real wage 
D) Average labor productivity

Question 3

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

Question 4

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. 
A) leading indicators. 
B) coincident indicators. 
C) lagging indicators. 
D) recession indicators.

Question 5

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. 
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.

Question 6

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; rise 
A) stay constant; fall 
B) fall; fall 
C) fall; stay constant 
D) stay constant; rise

Question 7

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 rates 
A) Business fixed investment 
B) Employment 
C) Stock prices 
D) Nominal interest rates

Question 8

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. 
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.

Question 9

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 durables 
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 durables

Question 10

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. 
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.

Question 11

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. 
A) the unemployment rate. 
B) the job finding rate. 
C) the underemployment rate. 
D) the job loss rate.

Question 12

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. 
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.

Question 13

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) Unemployment 
A) Residential investment 
B) Nominal interest rates 
C) Industrial production 
D) Unemployment

Question 14

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. 
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.

Question 15

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. 
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 16

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

Accepted Answer

Business cycles exhibit recurrence and p

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

Question 18

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 19

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 purchases 
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 purchases

Question 20

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

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

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

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

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

Which of the following is true?

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

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

Industries that are extremely sensitive to the business cycle are the

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

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

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

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

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

Business cycles all display the following characteristics except

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

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

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

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

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.

Introduction to Macroeconomics

The Measurement and Structure of the National Economy

Productivity, output, and Employment

Consumption, saving, and Investment

Saving and Investment in the Open Economy

Long-Run Economic Growth

The Asset Market, money, and Prices

The Is-Lmad-As Model

Classical Business Cycle Analysis

Keynesianism: the Macroeconomics of Wage and Price Rigidity

Unemployment and Inflation

Exchange Rates, business Cycles, and Macroeconomic Policy in the Open Economy

Monetary Policy and the Federal Reserve System

Government Spending and Its Financing

Filters

Exam 8: Business Cycles

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

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

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

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

Which of the following is true?

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

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

Industries that are extremely sensitive to the business cycle are the

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

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

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

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

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

Business cycles all display the following characteristics except

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

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

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

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

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.

Introduction to Macroeconomics

The Measurement and Structure of the National Economy

Productivity, output, and Employment

Consumption, saving, and Investment

Saving and Investment in the Open Economy

Long-Run Economic Growth

The Asset Market, money, and Prices

The Is-Lmad-As Model

Classical Business Cycle Analysis

Keynesianism: the Macroeconomics of Wage and Price Rigidity

Unemployment and Inflation

Exchange Rates, business Cycles, and Macroeconomic Policy in the Open Economy

Monetary Policy and the Federal Reserve System

Government Spending and Its Financing

Filters

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