Question 1

Which of the following macroeconomic variables is not seasonally procyclical?

Accepted Answer

A)  the nominal money stock 
B)  average labour productivity 
C)  the unemployment rate 
D)  government spending 
A)  the nominal money stock 
B)  average labour productivity 
C)  the unemployment rate 
D)  government spending C

Question 2

A variable that tends to move in advance of aggregate economic activity is called

Accepted Answer

A)  a leading variable. 
B)  a coincident variable. 
C)  a lagging variable. 
D)  an acyclical variable. 
A)  a leading variable. 
B)  a coincident variable. 
C)  a lagging variable. 
D)  an acyclical variable. A

Question 3

Which of the following macroeconomic variables is procyclical and coincident with the business cycle?

Accepted Answer

A)  residential investment 
B)  nominal interest rates 
C)  industrial production 
D)  unemployment 
A)  residential investment 
B)  nominal interest rates 
C)  industrial production 
D)  unemployment C

Question 4

Which of the following macroeconomic variables is procyclical and leads the business cycle?

Accepted Answer

A)  business fixed investment 
B)  the money supply 
C)  nominal interest rates 
D)  unemployment 
A)  business fixed investment 
B)  the money supply 
C)  nominal interest rates 
D)  unemployment

Question 5

Which of the following is included in the index of leading indicators calculated by Statistic Canada?

Accepted Answer

A)  Retail sales of furniture and appliances 
B)  Exchange rate 
C)  Unemployment rate 
D)  Nominal GDP 
A)  Retail sales of furniture and appliances 
B)  Exchange rate 
C)  Unemployment rate 
D)  Nominal GDP

Question 6

The worst recessions after World War II occurred

Accepted Answer

A)  during 1945-1946 and 1973-1975. 
B)  during 1957-1958 and 1973-1975. 
C)  during 1953-1954 and 1981-1982. 
D)  during 1945-1946 and 1981-1982. 
A)  during 1945-1946 and 1973-1975. 
B)  during 1957-1958 and 1973-1975. 
C)  during 1953-1954 and 1981-1982. 
D)  during 1945-1946 and 1981-1982.

Question 7

The longest contraction in Canadian history occurred

Accepted Answer

A)  during the 1870s. 
B)  in the years right before World War I began. 
C)  during the 1930s. 
D)  during the 1970s. 
A)  during the 1870s. 
B)  in the years right before World War I began. 
C)  during the 1930s. 
D)  during the 1970s.

Question 8

The three main components of the aggregate demand-aggregate supply model include

Accepted Answer

A)  AD, SRAS, and LM. 
B)  SRAS, LIRAS, and IS. 
C)  AD, IS, and LM. 
D)  AD, SRAS, and LRAS. 
A)  AD, SRAS, and LM. 
B)  SRAS, LIRAS, and IS. 
C)  AD, IS, and LM. 
D)  AD, SRAS, and LRAS.

Question 9

Describe briefly what are the major differences between the classical economists and the Keynesian economists with regard to causes of business cycles, long-run adjustments to shock, and the government policies in restoring the full employment.

Accepted Answer

The classical economists argue that the

Question 10

Turning points in business cycles occur when

Accepted Answer

A)  a new business cycle is initiated at the trough. 
B)  the economy hits the peak or trough in the business cycle. 
C)  the business cycle begins to follow a new pattern that differs from previous business cycles. 
D)  a new business cycle is initiated at the peak. 
A)  a new business cycle is initiated at the trough. 
B)  the economy hits the peak or trough in the business cycle. 
C)  the business cycle begins to follow a new pattern that differs from previous business cycles. 
D)  a new business cycle is initiated at the peak.

Question 11

Christina Romer's estimates of the business cycles prior to World War II showed that

Accepted Answer

A)  the business cycles had greater fluctuations before World War II than previous estimates had shown. 
B)  the business cycles had smaller fluctuations before World War II than previously estimated, but still larger fluctuations than after World War I. 
C)  the business cycles had smaller fluctuations before World War II. 
D)  there was no difference in the size of business fluctuations prior to and after World War II. 
A)  the business cycles had greater fluctuations before World War II than previous estimates had shown. 
B)  the business cycles had smaller fluctuations before World War II than previously estimated, but still larger fluctuations than after World War I. 
C)  the business cycles had smaller fluctuations before World War II. 
D)  there was no difference in the size of business fluctuations prior to and after World War II.

Question 12

An economic variable that moves in the same direction as aggregate economic activity (up in expansions, down in contractions) is called

Accepted Answer

A)  procyclical. 
B)  countercyclical. 
C)  acyclical. 
D)  a leading variable. 
A)  procyclical. 
B)  countercyclical. 
C)  acyclical. 
D)  a leading variable.

Question 13

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

Accepted Answer

A)  persistence. 
B)  comovement. 
C)  periodicity. 
D)  recurrence. 
A)  persistence. 
B)  comovement. 
C)  periodicity. 
D)  recurrence.

Question 14

Describe the major features of the business cycle. Be sure to discuss what variables are affected by the cycle, a description of the key features that are apparent in the data, how variables are related to one another, how regular the cycle is, and how predictable the cycle is.

Accepted Answer

The business cycle is defined as a fluct

Question 15

What are the two main components of business cycle theories?

Accepted Answer

A)  a description of shocks and a model of how the economy responds to them 
B)  a model of how people decide to spend and a description of the government's role in the economy 
C)  a model of how equilibrium is reached and a description of the government's role 
D)  a description of shocks and a description of the government's role in the economy 
A)  a description of shocks and a model of how the economy responds to them 
B)  a model of how people decide to spend and a description of the government's role in the economy 
C)  a model of how equilibrium is reached and a description of the government's role 
D)  a description of shocks and a description of the government's role in the economy

Question 16

Which of the following is not a commonly cited problem with the Index of Leading Economic Indicators?

Accepted Answer

A)  On several occasions the index has given false signals, predicting a recession when none occurred. 
B)  By relying too heavily on financial variables, the index becomes overly sensitive to sudden changes in financial markets. 
C)  The index provides little information on the severity of the upcoming recession. 
D)  As the economy changes over time, the ability of macroeconomic variables to predict changes in the economy will improve for some, grow worse for others. 
A)  On several occasions the index has given false signals, predicting a recession when none occurred. 
B)  By relying too heavily on financial variables, the index becomes overly sensitive to sudden changes in financial markets. 
C)  The index provides little information on the severity of the upcoming recession. 
D)  As the economy changes over time, the ability of macroeconomic variables to predict changes in the economy will improve for some, grow worse for others.

Question 17

Which of the following is not included in the index of leading indicators calculated by Statistic Canada?

Accepted Answer

A)  US composite leading index 
B)  GDP 
C)  Money supply 
D)  Employment in business and personal services 
A)  US composite leading index 
B)  GDP 
C)  Money supply 
D)  Employment in business and personal services

Question 18

When a recession occurs, do economists expect it to be a temporary phenomenon? Or is there some degree of permanence? What is the empirical evidence?

Accepted Answer

Recent research suggests that recessions

Question 19

Some economists contend that the economywide average real wage may not be a good indicator of the real wage because

Accepted Answer

A)  when previously unemployed workers enter the work force, the average real wage could decline even if all workers' wages have increased. 
B)  it fails to reflect productivity changes. 
C)  it fails to reflect qualitative changes in goods. 
D)  data used to calculate the average real wage is not collected from all sectors of the economy. 
A)  when previously unemployed workers enter the work force, the average real wage could decline even if all workers' wages have increased. 
B)  it fails to reflect productivity changes. 
C)  it fails to reflect qualitative changes in goods. 
D)  data used to calculate the average real wage is not collected from all sectors of the economy.

Question 20

In Canada, who officially determines whether the economy is in a recession or expansion?

Accepted Answer

A)  the Prime Minister 
B)  Parliament 
C)  the Bank of Canada 
D)  Statistics Canada 
A)  the Prime Minister 
B)  Parliament 
C)  the Bank of Canada 
D)  Statistics Canada

Which of the following macroeconomic variables is not seasonally procyclical?

A variable that tends to move in advance of aggregate economic activity is called

Which of the following macroeconomic variables is procyclical and coincident with the business cycle?

Which of the following macroeconomic variables is procyclical and leads the business cycle?

Which of the following is included in the index of leading indicators calculated by Statistic Canada?

The worst recessions after World War II occurred

The longest contraction in Canadian history occurred

The three main components of the aggregate demand-aggregate supply model include

Describe briefly what are the major differences between the classical economists and the Keynesian economists with regard to causes of business cycles, long-run adjustments to shock, and the government policies in restoring the full employment.

Turning points in business cycles occur when

Christina Romer's estimates of the business cycles prior to World War II showed that

An economic variable that moves in the same direction as aggregate economic activity (up in expansions, down in contractions) is called

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

Describe the major features of the business cycle. Be sure to discuss what variables are affected by the cycle, a description of the key features that are apparent in the data, how variables are related to one another, how regular the cycle is, and how predictable the cycle is.

What are the two main components of business cycle theories?

Which of the following is not a commonly cited problem with the Index of Leading Economic Indicators?

Which of the following is not included in the index of leading indicators calculated by Statistic Canada?

When a recession occurs, do economists expect it to be a temporary phenomenon? Or is there some degree of permanence? What is the empirical evidence?

Some economists contend that the economywide average real wage may not be a good indicator of the real wage because

In Canada, who officially determines whether the economy is in a recession or expansion?

Introduction to Macroeconomics

The Measurement and Structure of the Canadian Economy

Productivity, Output, and Employment

Consumption, Saving, and Investment

Saving and Investment in the Open Economy

Long-Run Economic Growth

The Asset Market, Money, and Prices

The IS-LMAD-AS Model: A General Framework for Macroeconomic Analysis

Exchange Rates, Business Cycles, and Macroeconomic Policy in the Open Economy

Classical Business Cycle Analysis: Market-Clearing Macroeconomics

Keynesian Business Cycle Analysis: Non-Market-Clearing Macroeconomics

Unemployment and Inflation

Monetary Policy and the Bank of Canada

Government Spending and Its Financing

Filters

Exam 8: Business Cycles

Which of the following macroeconomic variables is not seasonally procyclical?

A variable that tends to move in advance of aggregate economic activity is called

Which of the following macroeconomic variables is procyclical and coincident with the business cycle?

Which of the following macroeconomic variables is procyclical and leads the business cycle?

Which of the following is included in the index of leading indicators calculated by Statistic Canada?

The worst recessions after World War II occurred

The longest contraction in Canadian history occurred

The three main components of the aggregate demand-aggregate supply model include

Describe briefly what are the major differences between the classical economists and the Keynesian economists with regard to causes of business cycles, long-run adjustments to shock, and the government policies in restoring the full employment.

Turning points in business cycles occur when

Christina Romer's estimates of the business cycles prior to World War II showed that

An economic variable that moves in the same direction as aggregate economic activity (up in expansions, down in contractions) is called

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

Describe the major features of the business cycle. Be sure to discuss what variables are affected by the cycle, a description of the key features that are apparent in the data, how variables are related to one another, how regular the cycle is, and how predictable the cycle is.

What are the two main components of business cycle theories?

Which of the following is not a commonly cited problem with the Index of Leading Economic Indicators?

Which of the following is not included in the index of leading indicators calculated by Statistic Canada?

When a recession occurs, do economists expect it to be a temporary phenomenon? Or is there some degree of permanence? What is the empirical evidence?

Some economists contend that the economywide average real wage may not be a good indicator of the real wage because

In Canada, who officially determines whether the economy is in a recession or expansion?

Introduction to Macroeconomics

The Measurement and Structure of the Canadian Economy

Productivity, Output, and Employment

Consumption, Saving, and Investment

Saving and Investment in the Open Economy

Long-Run Economic Growth

The Asset Market, Money, and Prices

The IS-LMAD-AS Model: A General Framework for Macroeconomic Analysis

Exchange Rates, Business Cycles, and Macroeconomic Policy in the Open Economy

Classical Business Cycle Analysis: Market-Clearing Macroeconomics

Keynesian Business Cycle Analysis: Non-Market-Clearing Macroeconomics

Unemployment and Inflation

Monetary Policy and the Bank of Canada

Government Spending and Its Financing

Filters