macro95ex8 - Chapter 8 Business Cycles T Multiple Choice...

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Chapter 8 Business Cycles T Multiple Choice Questions 1. One of the first organizations to investigate the business cycle was (a) the Federal Reserve System. (b) the National Bureau of Economic Research. (c) the Council of Economic Advisors. (d) the Brookings Institution. Answer: B Level of difficulty: 1 Section: 8.1 2. The trough of a business cycle occurs when _____ hits its lowest point. (a) inflation (b) the money supply (c) aggregate economic activity (d) the unemployment rate Answer: C Level of difficulty: 1 Section: 8.1 3. The low point in the business cycle is referred to as the (a) expansion. (b) boom. (c) trough. (d) peak. Answer: C Level of difficulty: 1 Section: 8.1 4. When aggregate economic activity is increasing, the economy is said to be in (a) an expansion. (b) a contraction. (c) a peak. (d) a turning point. Answer: A Level of difficulty: 1 Section: 8.1
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Chapter 8 Business Cycles 119 5. When aggregate economic activity is declining, the economy is said to be in (a) a contraction. (b) an expansion. (c) a trough. (d) a turning point. Answer: A Level of difficulty: 1 Section: 8.1 6. Peaks and troughs of the business cycle are known collectively as (a) volatility. (b) turning points. (c) equilibrium points. (d) real business cycle events. Answer: B Level of difficulty: 1 Section: 8.1 7. Who officially determines whether the economy is in a recession or expansion? (a) The President of the United States (b) The U.S. Congress (c) The Federal Reserve Board of Governors (d) The National Bureau of Economic Research Answer: D Level of difficulty: 1 Section: 8.1 8. Research on the effects of recessions on the real level of GDP shows that (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. Answer: C Level of difficulty: 1 Section: 8.1 9. The tendency of many different economic variables to have regular and predictable patterns across industries over the business cycle is called (a) persistence. (b) comovement. (c) periodicity. (d) recurrence. Answer: B Level of difficulty: 1 Section: 8.1
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120 Abel/Bernanke • Macroeconomics, Fifth Edition 10. The tendency for declines in economic activity to be followed by further declines, and for growth in economic activity to be followed by more growth is called (a) persistence. (b) comovement. (c) periodicity. (d) recurrence. Answer: A Level of difficulty: 1 Section: 8.1 11. The longest contraction in American history occurred (a) during the 1870s. (b) in the years right before World War I began. (c) during the 1930s. (d) during the 1970s. Answer: A Level of difficulty: 1 Section: 8.2 12. The long boom occurred in the (a) 1920s and 1930s.
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This note was uploaded on 03/15/2012 for the course ECON 101 taught by Professor Carlitos during the Spring '11 term at Alaska Bible.

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macro95ex8 - Chapter 8 Business Cycles T Multiple Choice...

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