Question 1

Predicting business cycles is difficult because

Accepted Answer

A)  they are very persistent. 
B)  the weather changes unpredictably. 
C)  statistics lie. 
D)  their frequency is irregular. 
A)  they are very persistent. 
B)  the weather changes unpredictably. 
C)  statistics lie. 
D)  their frequency is irregular. D

Question 2

A business cycle trough is a

Accepted Answer

A)  small positive deviation from trend in real GDP. 
B)  relatively large positive deviation from trend in real GDP. 
C)  small negative deviation from trend in real GDP. 
D)  relatively large negative deviation from trend in real GDP. 
A)  small positive deviation from trend in real GDP. 
B)  relatively large positive deviation from trend in real GDP. 
C)  small negative deviation from trend in real GDP. 
D)  relatively large negative deviation from trend in real GDP. D

Question 3

When a macroeconomic aggregate is procyclical

Accepted Answer

A)  it grows faster than GDP. 
B)  its deviations from trend generally change before the deviations from trend in GDP do. 
C)  its deviations from trend generally change more that the deviations from trend in GDP. 
D)  its deviations from trend are more often of the same sign as the deviations from trend in GDP. 
A)  it grows faster than GDP. 
B)  its deviations from trend generally change before the deviations from trend in GDP do. 
C)  its deviations from trend generally change more that the deviations from trend in GDP. 
D)  its deviations from trend are more often of the same sign as the deviations from trend in GDP. D

Question 4

A time series is

Accepted Answer

A)  the length of a business cycle. 
B)  a macroeconomic aggregate that does not lead or lag the business cycle. 
C)  data that is subject to revision. 
D)  a sequence of dated measurements. 
A)  the length of a business cycle. 
B)  a macroeconomic aggregate that does not lead or lag the business cycle. 
C)  data that is subject to revision. 
D)  a sequence of dated measurements.

Question 5

Which of the following is not a correct characterization of the U.S. business cycle?

Accepted Answer

A)  Employment lags GDP. 
B)  Consumption is coincident. 
C)  Money lags GDP. 
D)  Investment is coincident. 
A)  Employment lags GDP. 
B)  Consumption is coincident. 
C)  Money lags GDP. 
D)  Investment is coincident.

Question 6

Which of the following is not a correct characterization of the U.S. business cycle?

Accepted Answer

A)  Prices are procyclical. 
B)  Consumption fluctuates little. 
C)  Investment fluctuates a lot. 
D)  Average labor productivity is procyclical. 
A)  Prices are procyclical. 
B)  Consumption fluctuates little. 
C)  Investment fluctuates a lot. 
D)  Average labor productivity is procyclical.

Question 7

Seasonal adjustment tends to

Accepted Answer

A)  smooth a time series with an important seasonal component. 
B)  accentuate seasonal fluctuations. 
C)  take out the deviations from trend in a time series. 
D)  make a time series acyclical. 
A)  smooth a time series with an important seasonal component. 
B)  accentuate seasonal fluctuations. 
C)  take out the deviations from trend in a time series. 
D)  make a time series acyclical.

Question 8

Macroeconomic forecasting is made more difficult due to the fact that

Accepted Answer

A)  deviations from trend in real GDP are persistent. 
B)  turning points are hard to predict. 
C)  there is no regularity in comovements. 
D)  consumption is smooth. 
A)  deviations from trend in real GDP are persistent. 
B)  turning points are hard to predict. 
C)  there is no regularity in comovements. 
D)  consumption is smooth.

Question 9

A lagging variable can be recognized by the fact that

Accepted Answer

A)  its persistence is smaller than that of GDP. 
B)  its turning points happen before the turning points of GDP. 
C)  the turning points of GDP happen before its turning points. 
D)  its persistence is larger than that of GDP. 
A)  its persistence is smaller than that of GDP. 
B)  its turning points happen before the turning points of GDP. 
C)  the turning points of GDP happen before its turning points. 
D)  its persistence is larger than that of GDP.

Question 10

Which of the following is not a correct characterization of the U.S. business cycle?

Accepted Answer

A)  Employment is procyclical. 
B)  Consumption is procyclical. 
C)  Real wages are procyclical. 
D)  Prices are procyclical. 
A)  Employment is procyclical. 
B)  Consumption is procyclical. 
C)  Real wages are procyclical. 
D)  Prices are procyclical.

Question 11

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

Question 12

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. 
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.

Question 13

Real investment 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. 
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.

Question 14

Seasonal adjustment

Accepted Answer

A)  should never be used. 
B)  is rarely used. 
C)  is a common characteristic of macroeconomic time series in wide use. 
D)  is not used by modern macroeconomists. 
A)  should never be used. 
B)  is rarely used. 
C)  is a common characteristic of macroeconomic time series in wide use. 
D)  is not used by modern macroeconomists.

Question 15

An example of a leading variable in the US is

Accepted Answer

A)  GDP. 
B)  investment is structures. 
C)  the consumer price index. 
D)  housing starts. 
A)  GDP. 
B)  investment is structures. 
C)  the consumer price index. 
D)  housing starts.

Question 16

A scatterplot allows us

Accepted Answer

A)  to mark peaks and troughs. 
B)  to determine whether a series leads or lags. 
C)  to see the comovement between two time series. 
D)  to determine how persistent a series is. 
A)  to mark peaks and troughs. 
B)  to determine whether a series leads or lags. 
C)  to see the comovement between two time series. 
D)  to determine how persistent a series is.

Question 17

If real GDP helps to predict the path of a particular macroeconomic variable,it is said to be a

Accepted Answer

A)  conventional variable. 
B)  coincident variable. 
C)  leading variable. 
D)  lagging variable. 
A)  conventional variable. 
B)  coincident variable. 
C)  leading variable. 
D)  lagging variable.

Question 18

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 behavior of co-movements among series, business cycles are all alike. 
D)  qualitative behavior of co-movements among series, business cycles are all alike. 
A)  severity, business cycles are all alike. 
B)  causation, business cycles are all alike. 
C)  quantitative behavior of co-movements among series, business cycles are all alike. 
D)  qualitative behavior of co-movements among series, business cycles are all alike.

Question 19

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. 
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.

Question 20

A scatterplot is

Accepted Answer

A)  a graph highlighting leads and lags. 
B)  a graph with one series on each axis. 
C)  a graph of one series against time. 
D)  a graph of two series against time. 
A)  a graph highlighting leads and lags. 
B)  a graph with one series on each axis. 
C)  a graph of one series against time. 
D)  a graph of two series against time.

Predicting business cycles is difficult because

A business cycle trough is a

When a macroeconomic aggregate is procyclical

A time series is

Which of the following is not a correct characterization of the U.S. business cycle?

Which of the following is not a correct characterization of the U.S. business cycle?

Seasonal adjustment tends to

Macroeconomic forecasting is made more difficult due to the fact that

A lagging variable can be recognized by the fact that

Which of the following is not a correct characterization of the U.S. business cycle?

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

Real consumption tends to be

Real investment tends to be

Seasonal adjustment

An example of a leading variable in the US is

A scatterplot allows us

If real GDP helps to predict the path of a particular macroeconomic variable,it is said to be a

Robert Lucas has popularized the notion that with respect to

A reverse Phillips Curve would consist of a

A scatterplot is

Introduction

Measurement

Consumer and Firm Behavior: 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

Money, Banking, Prices, and Monetary Policy

Business Cycle Models with Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking

Inflation, the Phillips Curve, and Central Bank Commitment

Filters

Exam 3: Business Cycle Measurement

Predicting business cycles is difficult because

A business cycle trough is a

When a macroeconomic aggregate is procyclical

A time series is

Which of the following is not a correct characterization of the U.S. business cycle?

Which of the following is not a correct characterization of the U.S. business cycle?

Seasonal adjustment tends to

Macroeconomic forecasting is made more difficult due to the fact that

A lagging variable can be recognized by the fact that

Which of the following is not a correct characterization of the U.S. business cycle?

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

Real consumption tends to be

Real investment tends to be

Seasonal adjustment

An example of a leading variable in the US is

A scatterplot allows us

If real GDP helps to predict the path of a particular macroeconomic variable,it is said to be a

Robert Lucas has popularized the notion that with respect to

A reverse Phillips Curve would consist of a

A scatterplot is

Introduction

Measurement

Consumer and Firm Behavior: 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

Money, Banking, Prices, and Monetary Policy

Business Cycle Models with Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking

Inflation, the Phillips Curve, and Central Bank Commitment

Filters