Question 1

Comment of the nature of economic fluctuations in terms of their predictability.

Accepted Answer

Economic fluctuations are irregular and unpredictable, as you can see by looking at a graph of real GDP over time.Some recessions are close together and others are far apart.There appears to be no recurring pattern.

Question 2

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

Accepted Answer

A) True 
 B)False  False

Question 3

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.

Accepted Answer

A) recession 
B) peak 
C) boom 
D) recovery 
A) recession 
B) peak 
C) boom 
D) recovery A

Question 4

In the real business cycle,

Accepted Answer

A) employment, labour productivity and real wages are procyclical. 
B) employment, labour productivity and real wages are countercyclical. 
C) employment, inflation are procyclical, but real wages are countercyclical. 
D) unemployment, labour productivity and real wages are procyclical. 
A) employment, labour productivity and real wages are procyclical. 
B) employment, labour productivity and real wages are countercyclical. 
C) employment, inflation are procyclical, but real wages are countercyclical. 
D) unemployment, labour productivity and real wages are procyclical.

Question 5

Recessions do not last forever because

Accepted Answer

A) workers get tired of being unemployed. 
B) firms eventually have incentives to increase employment and produce more output. 
C) government steps in and boosts spending back to long-run levels. 
D) central banks have control over the money supply. 
A) workers get tired of being unemployed. 
B) firms eventually have incentives to increase employment and produce more output. 
C) government steps in and boosts spending back to long-run levels. 
D) central banks have control over the money supply.

Question 6

Figure 1.
  
-Referring to Figure 1 there was a period of economic growth between which years?

Accepted Answer

A) 1991 to 1994 
B) 1991 to just beyond 2007 
C) 1992 to 1994 
D) 1992 to just beyond 2007 
A) 1991 to 1994 
B) 1991 to just beyond 2007 
C) 1992 to 1994 
D) 1992 to just beyond 2007

Question 7

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

Accepted Answer

A) most economists can predict the business cycle. 
B) the business cycle is quite regular, with a new phase beginning every 24 months. 
C) business cycles are irregular and unpredictable in the short run. 
D) only the World Bank can predict moves in the business cycle. 
A) most economists can predict the business cycle. 
B) the business cycle is quite regular, with a new phase beginning every 24 months. 
C) business cycles are irregular and unpredictable in the short run. 
D) only the World Bank can predict moves in the business cycle.

Question 8

Deterministic trends are

Accepted Answer

A) where variables change by some random amount in each time period. 
B) always constant and dependent of time for the series being analyzed. 
C) constant, positive or negative independent of time for the series being analyzed. 
D) always positive. 
A) where variables change by some random amount in each time period. 
B) always constant and dependent of time for the series being analyzed. 
C) constant, positive or negative independent of time for the series being analyzed. 
D) always positive.

Question 9

According to the new classical model, what effects will a rise in aggregate demand have on a county's GDP?

Accepted Answer

Aggregate demand is composed of consumpt

Question 10

Use the information in table below to calculate the mean growth rate. $\begin{array}{|l|l|}
\hline \text { Time series data collected over } & 30 \text { years } \
\hline \text { Highest Peak } & 7 \% \
\hline \text { Next Trough } & -2 \% \
\hline \text { Number of peaks and troughs } & 4 \
\hline \text { Sum of annual growth rates } & 75 \
\hline \text { Sum of annual positive growth rates } & 90 \
\hline
\end{array}$

Accepted Answer

A) 2.5% 
B) 3% 
C) 5 
D) 9 
A) 2.5% 
B) 3% 
C) 5 
D) 9

Question 11

A technical definition gives a recession occurring after six successive months of negative economic growth.

Accepted Answer

A) True 
 B)False

Question 12

What are the main causes of changes in the business cycle?

Accepted Answer

The behaviour and decision making of fir

Question 13

Figure 1.
  
-Referring to Figure 1, the amplitude in the early 1970s was about:

Accepted Answer

A) 2 
B) 7.5 
C) 9.5 
D) 2 years 
E) 4 years 
A) 2 
B) 7.5 
C) 9.5 
D) 2 years 
E) 4 years

Question 14

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

Accepted Answer

A) Inflation is falling. 
B) Unemployment is at its lowest. 
C) GDP growth is at its highest in the business cycle. 
D) Interest rates are low. 
A) Inflation is falling. 
B) Unemployment is at its lowest. 
C) GDP growth is at its highest in the business cycle. 
D) Interest rates are low.

Question 15

Economists refer to fluctuations in output as the "business cycle" because movements in output are irregular and unpredictable.

Accepted Answer

A) True 
 B)False

Question 16

Which would cause SA firms to think about cutting back production?

Accepted Answer

A) A fall in real wages. 
B) Improvement in the South African economy. 
C) Build-up of stock levels. 
D) Ease of credit controls. 
A) A fall in real wages. 
B) Improvement in the South African economy. 
C) Build-up of stock levels. 
D) Ease of credit controls.

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

What is meant by co-movement, and what are the relationships between key variables and GDP?

Accepted Answer

Co-movement is the movement of pairs of

Question 19

Name two macroeconomic variables that decline when the economy goes into a recession.Name one macroeconomic variable that rises during a recession.

Accepted Answer

Two macroeconomic variables that decline

Question 20

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

Accepted Answer

A leading indicator is one which can be

Comment of the nature of economic fluctuations in terms of their predictability.

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

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.

In the real business cycle,

Recessions do not last forever because

Figure 1. -Referring to Figure 1 there was a period of economic growth between which years?

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

Deterministic trends are

According to the new classical model, what effects will a rise in aggregate demand have on a county's GDP?

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

A technical definition gives a recession occurring after six successive months of negative economic growth.

What are the main causes of changes in the business cycle?

Figure 1. -Referring to Figure 1, the amplitude in the early 1970s was about:

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

Economists refer to fluctuations in output as the "business cycle" because movements in output are irregular and unpredictable.

Which would cause SA firms to think about cutting back production?

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

What is meant by co-movement, and what are the relationships between key variables and GDP?

Name two macroeconomic variables that decline when the economy goes into a recession.Name one macroeconomic variable that rises during a recession.

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

What Is Economics

Thinking Like an Economist

Measuring a Nations Well-Being

Measuring the Cost of Living

Production and Growth

Unemployment

Saving, Investment and the Financial System

The Basic Tools of Finance

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Keynesian Economics and the Is-Lm Analysis

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short Run Trade-Off Between Inflation and Unemployment

Supply Side Policies

The Financial Crisis and Sovereign Debt

Common Currency Areas and European Monetary Union

Filters

Exam 13: Business Cycles

Comment of the nature of economic fluctuations in terms of their predictability.

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

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.

In the real business cycle,

Recessions do not last forever because

Figure 1. -Referring to Figure 1 there was a period of economic growth between which years?

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

Deterministic trends are

According to the new classical model, what effects will a rise in aggregate demand have on a county's GDP?

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

A technical definition gives a recession occurring after six successive months of negative economic growth.

What are the main causes of changes in the business cycle?

Figure 1. -Referring to Figure 1, the amplitude in the early 1970s was about:

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

Economists refer to fluctuations in output as the "business cycle" because movements in output are irregular and unpredictable.

Which would cause SA firms to think about cutting back production?

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

What is meant by co-movement, and what are the relationships between key variables and GDP?

Name two macroeconomic variables that decline when the economy goes into a recession.Name one macroeconomic variable that rises during a recession.

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

What Is Economics

Thinking Like an Economist

Measuring a Nations Well-Being

Measuring the Cost of Living

Production and Growth

Unemployment

Saving, Investment and the Financial System

The Basic Tools of Finance

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Keynesian Economics and the Is-Lm Analysis

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short Run Trade-Off Between Inflation and Unemployment

Supply Side Policies

The Financial Crisis and Sovereign Debt

Common Currency Areas and European Monetary Union

Filters