Gordon_Answers11e_ch01

Gordon_Answers11e_ch01 - 4 Gordon Macroeconomics, Eleventh...

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4 Gordon • Macroeconomics, Eleventh Edition ± Answers to Questions in Textbook 1. Question 1 does not have a solution. It is intended first, to get the students to search out news stories that are related to economics, and second, to get them to distinguish between stories that have a macroeconomic theme as opposed to a microeconomic orientation. 2. Using the quarterly GDP data contained in Table A-2, the recession phases of the basic business cycle would seem to be: 1947:Q1 to 1947:Q3; 1948:Q4 to 1949:Q4; 1953:Q2 to 1954:Q1; 1957:Q3 to 1958:Q1; 1960:Q1 to 1960:Q4; 1969:Q3 to 1970:Q4; 1973:Q4 to 1975:Q1; 1980:Q1 to 1980:Q3; 1981:Q3 to 1982:Q3; 1990:Q3 to 1991:Q1; and 2001:Q2 to 2001:Q3. The expansion phases would seem to be: 1947:Q4 to 1948:Q4; 1949:Q4 to 1953:Q2; 1954:Q1 to 1957:Q3; 1958:Q1 to 1960:Q1; 1960:Q4 to 1969:Q3; 1970:Q4 to 1973:Q4; 1975:Q1 to 1980:Q1; 1980:Q3 to 1981:Q3; 1982:Q3 to 1990:Q3; 1991:Q1 to 2001:Q2; and 2001:Q3 to the present. Please note that these dates do not conform exactly to the official dates of recessions and expansions as determined by the National Bureau of Economic Research (NBER). For example, there was no recession in 1947, and the 1960–61 recession ended in the first quarter of 1960, not the last quarter of 1960. The NBER’s Web site, www.nber.org, has information on the precise starting and ending dates of recessions and expansions. 3. In terms of number of quarters during which real GDP declined, note that neither of the two recessions since 1983 were longer than any of the recessions during the period 1947–1982. Second, no recession prior to 1983 was as short as the 2001 recession, again in terms of the number of quarters during which real GDP declined. Furthermore, real GDP declined for a greater number
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Gordon_Answers11e_ch01 - 4 Gordon Macroeconomics, Eleventh...

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