26 - Chapter 26 - Business Cycles, Unemployment, and...

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Chapter 26 - Business Cycles, Unemployment, and Inflation Chapter 26 Business Cycles, Unemployment, and Inflation Multiple Choice Questions 1. Recurring upswings and downswings in an economy's real GDP over time are called: A. recessions. B. business cycles. C. output yo-yos. D. total product oscillations. 2. In the United States, business cycles have occurred against a backdrop of a long-run trend of: A. declining unemployment. B. stagnant productivity growth. C. rising real GDP. D. rising inflation. 4. As it relates to economic growth, the term long-run trend refers to: A. the long-run increase in the relative importance of durable goods in the U.S. economy. B. the long-term expansion or contraction of business activity that occurs over 50 or 100 years. C. fluctuations in business activity that average 40 months in duration. D. fluctuations in business activity that occur around Christmas, Easter, and so forth. 6. The industries or sectors of the economy in which business cycle fluctuations tend to affect output the most are: A. military goods and capital goods. B. services and nondurable consumer goods. C. clothing and education. D. capital goods and durable consumer goods. 26-1
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Chapter 26 - Business Cycles, Unemployment, and Inflation 7. During a severe recession, we would expect output to fall the most in: A. the health-care industry. B. the clothing industry. C. agriculture. D. the construction industry. 8. The phase of the business cycle in which real GDP declines is called: A. the peak. B. an expansion. C . a recession. D. the trough. 9. The phase of the business cycle in which real GDP is at a minimum is called: A. the peak. B. a recession. C. the trough. D. the pits. 11. The production of durable goods varies more than the production of nondurable goods because: A. durables purchases are nonpostponable. B. durables purchases are postponable. C. the producers of nondurables have monopoly power. D. producers of durables are highly competitive. 12. A recession is a period in which: A. cost-push inflation is present. B. nominal domestic output falls. C. demand-pull inflation is present. D. real domestic output falls. 26-2
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Chapter 26 - Business Cycles, Unemployment, and Inflation 13. In which phase of the business cycle will the economy most likely experience rising real output and falling unemployment rates? A. expansion B. recession C. peak D. trough 17. An unexpected increase in total spending will cause an increase in GDP: A. if prices are sticky. B. if prices are fully flexible. C. regardless of whether prices are sticky or fully flexible. D. only if prices are stuck in the long term. Answer the next question(s) on the basis of the following information about the hypothetical economy of Scoob. All figures are in millions. 21. Refer to the above information. The labor force in Scoob is:
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26 - Chapter 26 - Business Cycles, Unemployment, and...

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