Exam 31: Business Cycles

Which of the following best apply to when a peak occurs in a business cycle?

The trend in GDP is generally:

If firms face a weak demand they are more likely to:

If trends do not exist then policy measures designed to reduce deviations from trend are misguided.

Use the information in table below to calculate the mean growth rate. Time series data collected over 30 years Highest Peak 7\% Next Trough -2\% Number of peaks and troughs 4 Sum of annual growth rates 75 Sum of annual positive growth rates 90

Which business cycle model believes that then policy measures designed to reduce deviations from trend are misguided.

Which is most sensitive to concerns about the future growth of the economy?

Over the last 50 years, UK real GDP has grown at about 5 per cent per year.

Figure 1. ​ ​ Referring to figure 1 in which year did the economy stagnate with little or no growth?

In the real business cycle model the causes of business cycles are:

Which consumer purchases are more volatile over the business cycle?

Deterministic trends are:

Which of the following statements is true?

In the New Classical model, when output is above trend, unemployment is countercyclical and employment will be above trend and so be procyclical. Inflation will be procyclical but real wages will be countercyclical because as output rises real wages fall.

The amplitude measures the difference between start and end of the business cycle.

What is the difference between a recession and a depression?

Marjorie maintains that she can predict when the economy is going to move up or down in a business cycle. In fact:

What is meant by a leading indicator? Comment on the OECD data below showing an index of composite indicators for the OECD area. ​

Procyclical is a variable that is above trend when GDP is above trend.

If you and your friends are still looking for a job eighteen months after graduation, even after lowering your wage expectations, you are probably in the _________ phase of the business cycle.