Question 1

According to Progressives, what are the four phases of a business cycle?

Accepted Answer

A)  Recovery, prosperity, crisis, recession 
B)  Recovery, expansion, contraction, recession 
C)  Recovery, peak, recession, depression. 
D)  Prosperity, crisis, peak, expansion 
A)  Recovery, prosperity, crisis, recession 
B)  Recovery, expansion, contraction, recession 
C)  Recovery, peak, recession, depression. 
D)  Prosperity, crisis, peak, expansion A

Question 2

Why is the economic downturn that occurred during the 1930s called the Great Depression?

Accepted Answer

A)  Because it was the first recession experienced by the United States. 
B)  Because it was the last recession experienced by the United States. 
C)  Because it was the most severe recession ever experienced in the United States. 
D)  Because it was the shortest depression on record. 
A)  Because it was the first recession experienced by the United States. 
B)  Because it was the last recession experienced by the United States. 
C)  Because it was the most severe recession ever experienced in the United States. 
D)  Because it was the shortest depression on record. C

Question 3

During the twentieth century, the United States experienced approximately

Accepted Answer

A)  3 recessions. 
B)  9 recessions. 
C)  20 recessions. 
D)  74 recessions. 
A)  3 recessions. 
B)  9 recessions. 
C)  20 recessions. 
D)  74 recessions. C

Question 4

How are profits calculated?

Accepted Answer

A)  Profits = Revenue-Costs 
B)  Profits = Revenue/Costs 
C)  Profits = Revenue-Taxes 
D)  Profits = Revenue + Costs 
A)  Profits = Revenue-Costs 
B)  Profits = Revenue/Costs 
C)  Profits = Revenue-Taxes 
D)  Profits = Revenue + Costs

Question 5

According to Progressives, what happens during a recovery?

Accepted Answer

A)  There is a rapid rise in interest rates. 
B)  Revenues are falling due to rising costs. 
C)  Revenues are rising rapidly while costs are still low. 
D)  Consumers begin to save more to recover from the recession. 
A)  There is a rapid rise in interest rates. 
B)  Revenues are falling due to rising costs. 
C)  Revenues are rising rapidly while costs are still low. 
D)  Consumers begin to save more to recover from the recession.

Question 6

What's the difference between a recession and a depression?

Accepted Answer

A)  A recession is accompanied by rising prices; a depression by falling prices. 
B)  A recession is a major expansion in economic activity; a depression is a contraction. 
C)  A recession is a small downturn in output and employment; a depression is a large downturn. 
D)  A recession lasts less than 3 quarters; a depression lasts longer than 3 quarters. 
A)  A recession is accompanied by rising prices; a depression by falling prices. 
B)  A recession is a major expansion in economic activity; a depression is a contraction. 
C)  A recession is a small downturn in output and employment; a depression is a large downturn. 
D)  A recession lasts less than 3 quarters; a depression lasts longer than 3 quarters.

Question 7

Business cycles

Accepted Answer

A)  occur in every type of economy. 
B)  occur only in capitalism. 
C)  occur in capitalism and feudalism. 
D)  occur only in socialism. 
A)  occur in every type of economy. 
B)  occur only in capitalism. 
C)  occur in capitalism and feudalism. 
D)  occur only in socialism.

Question 8

Pablo was laid off from his job as a computer programmer 6 months ago. He drives a cab on weekends to make ends meet, while he looks for a new permanent job as a programmer.

Accepted Answer

A)  Pablo is unemployed. 
B)  Pablo is employed. 
C)  Pablo is a discouraged worker. 
D)  Pablo is involuntarily unemployed. 
A)  Pablo is unemployed. 
B)  Pablo is employed. 
C)  Pablo is a discouraged worker. 
D)  Pablo is involuntarily unemployed.

Question 9

What is an "expansion?"

Accepted Answer

A)  An increase in economic activity measured by output, employment and profits. 
B)  An increase in market share by an oligopoly. 
C)  Foreign investment. 
D)  A new team in professional sports. 
A)  An increase in economic activity measured by output, employment and profits. 
B)  An increase in market share by an oligopoly. 
C)  Foreign investment. 
D)  A new team in professional sports.

Question 10

Robert Lucas, a well-known University of Chicago economist and winner of the 1995 Nobel Prize, argued that shocks to the economy come primarily from

Accepted Answer

A)  forces internal to the capitalist system. 
B)  mistakes by government. 
C)  technological change. 
D)  major shifts in commodity prices. 
A)  forces internal to the capitalist system. 
B)  mistakes by government. 
C)  technological change. 
D)  major shifts in commodity prices.

Question 11

What is "real business cycle theory"?

Accepted Answer

A)  Outside shocks disrupt the economy and require government action to stabilize expectations. 
B)  The most important shocks to the economy come from technological change. 
C)  The most important shocks to the economy come from government policy mistakes. 
D)  Business cycles are caused by the internal dynamics of capitalism. 
A)  Outside shocks disrupt the economy and require government action to stabilize expectations. 
B)  The most important shocks to the economy come from technological change. 
C)  The most important shocks to the economy come from government policy mistakes. 
D)  Business cycles are caused by the internal dynamics of capitalism.

Question 12

What is a business cycle?

Accepted Answer

A)  The length of time a business can sell a product before it becomes obsolete. 
B)  The length of time it takes a business to take a product from the development stage to the mass market stage. 
C)  The ups and downs of the economy as measured by GDP growth, employment and profits. 
D)  The response of the economy to disturbances resulting from outside shocks. 
A)  The length of time a business can sell a product before it becomes obsolete. 
B)  The length of time it takes a business to take a product from the development stage to the mass market stage. 
C)  The ups and downs of the economy as measured by GDP growth, employment and profits. 
D)  The response of the economy to disturbances resulting from outside shocks.

Question 13

According to Progressives, what causes the expansion to come to an end?

Accepted Answer

A)  Profits are squeezed by rising costs and lower revenues. 
B)  Excessive exuberance leads to investment mistakes. 
C)  Outside shocks to the economy increase consumer spending. 
D)  Profits expand reducing money available for investment. 
A)  Profits are squeezed by rising costs and lower revenues. 
B)  Excessive exuberance leads to investment mistakes. 
C)  Outside shocks to the economy increase consumer spending. 
D)  Profits expand reducing money available for investment.

Question 14

According to Progressives, what is occurring at the peak of the cycle?

Accepted Answer

A)  Slowdown in consumer spending, falling raw materials costs and falling production. 
B)  Increasing consumer spending, increasing raw materials costs and increasing production. 
C)  Slowdown in consumer spending, increasing raw materials costs and increasing production. 
D)  Rising profits, increasing labor income, rising costs. 
A)  Slowdown in consumer spending, falling raw materials costs and falling production. 
B)  Increasing consumer spending, increasing raw materials costs and increasing production. 
C)  Slowdown in consumer spending, increasing raw materials costs and increasing production. 
D)  Rising profits, increasing labor income, rising costs.

Question 15

What does the term, "discouraged worker," mean?

Accepted Answer

A)  Someone who is unemployed. 
B)  Someone who wants to work but has given up looking for a job. 
C)  Someone who is working part-time but wants to work full-time. 
D)  Someone who does not like his or her job. 
A)  Someone who is unemployed. 
B)  Someone who wants to work but has given up looking for a job. 
C)  Someone who is working part-time but wants to work full-time. 
D)  Someone who does not like his or her job.

Question 16

What is a "contraction"?

Accepted Answer

A)  A downturn in economic activity. 
B)  A loss of market share by a corporation. 
C)  Closing a factory resulting in a major layoff. 
D)  A credit crunch. 
A)  A downturn in economic activity. 
B)  A loss of market share by a corporation. 
C)  Closing a factory resulting in a major layoff. 
D)  A credit crunch.

Question 17

According to Progressives, what is the most important factor in causing business cycles?

Accepted Answer

A)  Business cycles are caused by external shocks to the economy. 
B)  Business cycles are caused by misguided government policies. 
C)  Business cycles are caused by the drive for profits. 
D)  Business cycles are caused by technological change. 
A)  Business cycles are caused by external shocks to the economy. 
B)  Business cycles are caused by misguided government policies. 
C)  Business cycles are caused by the drive for profits. 
D)  Business cycles are caused by technological change.

According to Progressives, what are the four phases of a business cycle?

Why is the economic downturn that occurred during the 1930s called the Great Depression?

During the twentieth century, the United States experienced approximately

How are profits calculated?

According to Progressives, what happens during a recovery?

What's the difference between a recession and a depression?

Business cycles

Pablo was laid off from his job as a computer programmer 6 months ago. He drives a cab on weekends to make ends meet, while he looks for a new permanent job as a programmer.

What is an "expansion?"

Robert Lucas, a well-known University of Chicago economist and winner of the 1995 Nobel Prize, argued that shocks to the economy come primarily from

What is "real business cycle theory"?

What is a business cycle?

According to Progressives, what causes the expansion to come to an end?

According to Progressives, what is occurring at the peak of the cycle?

What does the term, "discouraged worker," mean?

What is a "contraction"?

According to Progressives, what is the most important factor in causing business cycles?

What Is Macroeconomics and the Evolution of Capitalism

The Classical View of the Macro-Economy

The Keynesian Revolution

National Income Accounting

Classical and Keynesian Graphical Analysis

Introduction to Economic Growth

Introduction to Business Cycles

Investment and Profit, and the Multiplier

Consumer Spending, and Credit and Interest

Housing Bubble, Financial Crisis, and Government Spending, Taxes, and Deficits

The Trade Gap

Globalization and the Spread of Instability

Inflation

Monetary Policy, Financial Regulation, and Debates Over Monetary Policy

Fiscal Policy: How to Stimulate the Economy

Fiscal Policy: Austerians and Deficit Hawks V Stimulus

A Road to Full Employment

Filters

Exam 12: Business Cycles

According to Progressives, what are the four phases of a business cycle?

Why is the economic downturn that occurred during the 1930s called the Great Depression?

During the twentieth century, the United States experienced approximately

How are profits calculated?

According to Progressives, what happens during a recovery?

What's the difference between a recession and a depression?

Business cycles

Pablo was laid off from his job as a computer programmer 6 months ago. He drives a cab on weekends to make ends meet, while he looks for a new permanent job as a programmer.

What is an "expansion?"

Robert Lucas, a well-known University of Chicago economist and winner of the 1995 Nobel Prize, argued that shocks to the economy come primarily from

What is "real business cycle theory"?

What is a business cycle?

According to Progressives, what causes the expansion to come to an end?

According to Progressives, what is occurring at the peak of the cycle?

What does the term, "discouraged worker," mean?

What is a "contraction"?

According to Progressives, what is the most important factor in causing business cycles?

What Is Macroeconomics and the Evolution of Capitalism

The Classical View of the Macro-Economy

The Keynesian Revolution

National Income Accounting

Classical and Keynesian Graphical Analysis

Introduction to Economic Growth

Introduction to Business Cycles

Investment and Profit, and the Multiplier

Consumer Spending, and Credit and Interest

Housing Bubble, Financial Crisis, and Government Spending, Taxes, and Deficits

The Trade Gap

Globalization and the Spread of Instability

Inflation

Monetary Policy, Financial Regulation, and Debates Over Monetary Policy

Fiscal Policy: How to Stimulate the Economy

Fiscal Policy: Austerians and Deficit Hawks V Stimulus

A Road to Full Employment

Filters