Exam 10: Economic Fluctuations

The classical model does a good job of explaining short-run fluctuations in the level of economic activity.

When GDP is rising,the economy is experiencing

Suppose a major computer virus struck the nation's computers and all hard drives were erased.What would happen in the labor market?

One difficulty with any explanation of economic fluctuations based on a shift in labor supply is that

Which of the following shocks is most likely to cause an expansion?

Which of the following could explain a leftward shift of the labor demand curve?

If workers become more productive,which of the following would happen in the labor market?

As the economy goes through an expansion,

When real GDP is falling,the economy is experiencing

Recessions typically last longer than expansions.

If a new computer program was developed that dramatically improved productivity in most firms,what would happen in the labor market?

Which of the following occurs during a recession?

A spending shock typically involves a dramatic reduction in spending in virtually all sectors of the economy simultaneously.

Half of American recessions since the early 1950s have been caused at least in part by rapid increases in oil prices.

Which of the following is a common reaction to an increase in the interest rate?

The classical assumption that labor markets clear makes it difficult for that model to explain recessions.

Why is a rightward shift of the labor supply curve difficult to rationalize in the classical model?

A shock that could trigger a recession is a

The classical model does a poor job of explaining the __________ because it assumes that the __________ always clears.

Which of the following shocks have caused most of the recessions since 1950?