Question 1

A business cycle trough is a

Accepted Answer

A)  small positive deviation from trend in real GDP. 
B)  relatively large positive deviation from trend in real GDP. 
C)  small negative deviation from trend in real GDP. 
D)  relatively large negative deviation from trend in real GDP. 
E)  minimum deviation from trend in real GDP. 
A)  small positive deviation from trend in real GDP. 
B)  relatively large positive deviation from trend in real GDP. 
C)  small negative deviation from trend in real GDP. 
D)  relatively large negative deviation from trend in real GDP. 
E)  minimum deviation from trend in real GDP. D

Question 2

If the correlation coefficient between x and y is equal to -1,we say that x and y are

Accepted Answer

A)  imperfectly negatively correlated. 
B)  perfectly negatively correlated. 
C)  lagging variables. 
D)  perfectly positively correlated. 
E)  countercyclical. 
A)  imperfectly negatively correlated. 
B)  perfectly negatively correlated. 
C)  lagging variables. 
D)  perfectly positively correlated. 
E)  countercyclical. B

Question 3

Comovement can be discerned by

Accepted Answer

A)  calculating the percentage deviations from trend in real GDP. 
B)  whether it is a procyclical or countercyclical variable. 
C)  calculating the correlation coefficient between the percentage deviations from trend. 
D)  determining if it is a lagging or leading indicator. 
E)  looking at the composite index of business leading indicators. 
A)  calculating the percentage deviations from trend in real GDP. 
B)  whether it is a procyclical or countercyclical variable. 
C)  calculating the correlation coefficient between the percentage deviations from trend. 
D)  determining if it is a lagging or leading indicator. 
E)  looking at the composite index of business leading indicators. C

Question 4

Which of the following is a feature of recent Canadian business cycles?

Accepted Answer

A)  The time series of deviations from trend in real GDP is quite choppy. 
B)  The time series of deviations from trend in real GDP is quite smooth. 
C)  There is no regularity to the amplitude of fluctuations in GDP below trend. 
D)  There is no regularity to the frequency of fluctuations in GDP below trend. 
E)  They are difficult to measure. 
A)  The time series of deviations from trend in real GDP is quite choppy. 
B)  The time series of deviations from trend in real GDP is quite smooth. 
C)  There is no regularity to the amplitude of fluctuations in GDP below trend. 
D)  There is no regularity to the frequency of fluctuations in GDP below trend. 
E)  They are difficult to measure.

Question 5

If the correlation coefficient between x and y is equal to 1,we say that x and y are

Accepted Answer

A)  perfectly positively correlated. 
B)  acyclical. 
C)  perfectly negatively correlated. 
D)  leading variables. 
E)  lagging variables. 
A)  perfectly positively correlated. 
B)  acyclical. 
C)  perfectly negatively correlated. 
D)  leading variables. 
E)  lagging variables.

Question 6

Investment tends to be a

Accepted Answer

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

Question 7

Robert Lucas has popularized the notion that with respect to

Accepted Answer

A)  severity, business cycles are all alike. 
B)  causation, business cycles are all alike. 
C)  quantitative behaviour of comovements among series, business cycles are all alike. 
D)  qualitative behaviour of comovements among series, business cycles are all alike. 
E)  deviations from trend real GDP, business cycles over time are all alike. 
A)  severity, business cycles are all alike. 
B)  causation, business cycles are all alike. 
C)  quantitative behaviour of comovements among series, business cycles are all alike. 
D)  qualitative behaviour of comovements among series, business cycles are all alike. 
E)  deviations from trend real GDP, business cycles over time are all alike.

Question 8

If the deviations from trend in a macroeconomic variable is neither procyclical not countercyclical,it is

Accepted Answer

A)  positively correlated. 
B)  a correlation coefficient. 
C)  lagging. 
D)  coincident. 
E)  acyclical. 
A)  positively correlated. 
B)  a correlation coefficient. 
C)  lagging. 
D)  coincident. 
E)  acyclical.

Question 9

Positive correlation between x and y implies that

Accepted Answer

A)  when x is high, y is high. 
B)  when x is high, y is low. 
C)  when x is zero, y is positive. 
D)  x and y are positively unrelated. 
E)  the trend is unpredictable. 
A)  when x is high, y is high. 
B)  when x is high, y is low. 
C)  when x is zero, y is positive. 
D)  x and y are positively unrelated. 
E)  the trend is unpredictable.

Question 10

Real investment tends to be

Accepted Answer

A)  procyclical and less variable than real GDP. 
B)  procyclical and more variable than real GDP. 
C)  countercyclical and less variable than real GDP. 
D)  countercyclical and more variable than real GDP. 
E)  acyclical with real GDP. 
A)  procyclical and less variable than real GDP. 
B)  procyclical and more variable than real GDP. 
C)  countercyclical and less variable than real GDP. 
D)  countercyclical and more variable than real GDP. 
E)  acyclical with real GDP.

Question 11

Difficulties in determining the cyclical pattern in real wage rates from aggregate data are primarily due to biases due to

Accepted Answer

A)  substitution behavior. 
B)  substantial differences across different business cycles. 
C)  variations in the composition of the labour force over the business cycle. 
D)  changing policy responses to business cycles. 
E)  variations in inflation and unemployment 
A)  substitution behavior. 
B)  substantial differences across different business cycles. 
C)  variations in the composition of the labour force over the business cycle. 
D)  changing policy responses to business cycles. 
E)  variations in inflation and unemployment

Question 12

Average labour productivity tends to be

Accepted Answer

A)  procyclical and less variable than real GDP. 
B)  procyclical and more variable than real GDP. 
C)  countercyclical and less variable than real GDP. 
D)  countercyclical and more variable than real GDP. 
E)  acyclical with real GDP. 
A)  procyclical and less variable than real GDP. 
B)  procyclical and more variable than real GDP. 
C)  countercyclical and less variable than real GDP. 
D)  countercyclical and more variable than real GDP. 
E)  acyclical with real GDP.

Question 13

A measure of the degree of correlation between two variables is a

Accepted Answer

A)  statistical correlation. 
B)  financial correlation. 
C)  correlation statistic. 
D)  correlation coefficient. 
E)  correlation variable. 
A)  statistical correlation. 
B)  financial correlation. 
C)  correlation statistic. 
D)  correlation coefficient. 
E)  correlation variable.

Question 14

The defining feature of business cycles is that they

Accepted Answer

A)  are inherently bad. 
B)  represent the underlying trend of real GDP in the economy. 
C)  are fluctuations about trend in real GDP. 
D)  measure prospects for future growth in the economy. 
E)  measure standards of living and productivity. 
A)  are inherently bad. 
B)  represent the underlying trend of real GDP in the economy. 
C)  are fluctuations about trend in real GDP. 
D)  measure prospects for future growth in the economy. 
E)  measure standards of living and productivity.

Question 15

The Great Moderation best applies to the behaviour of which series in Canada?

Accepted Answer

A)  stock prices 
B)  real GDP 
C)  investment 
D)  inflation 
E)  nominal GDP 
A)  stock prices 
B)  real GDP 
C)  investment 
D)  inflation 
E)  nominal GDP

Question 16

If the correlation between GDP and y is -0.75,we say y is

Accepted Answer

A)  procyclical. 
B)  acyclical. 
C)  positively correlated. 
D)  countercyclical. 
E)  persistent. 
A)  procyclical. 
B)  acyclical. 
C)  positively correlated. 
D)  countercyclical. 
E)  persistent.

Question 17

Business cycle persistence refers to the property that

Accepted Answer

A)  real GDP is rarely exactly at trend. 
B)  booms and recessions last a long time. 
C)  when real GDP is above trend, it tends to stay above trend, and when it is below trend, it tends to stay below trend. 
D)  business cycles are persistently hard to predict. 
E)  real GDP tends to stay in the peaks and troughs of the business cycle. 
A)  real GDP is rarely exactly at trend. 
B)  booms and recessions last a long time. 
C)  when real GDP is above trend, it tends to stay above trend, and when it is below trend, it tends to stay below trend. 
D)  business cycles are persistently hard to predict. 
E)  real GDP tends to stay in the peaks and troughs of the business cycle.

Question 18

An example of a statistical model is the

Accepted Answer

A)  WHARTON model. 
B)  Bayesian vector autoregression model. 
C)  DRI (Data Resources Incorporated) model. 
D)  Keynesian model. 
E)  Milton Friedman model. 
A)  WHARTON model. 
B)  Bayesian vector autoregression model. 
C)  DRI (Data Resources Incorporated) model. 
D)  Keynesian model. 
E)  Milton Friedman model.

Question 19

A reverse Phillips Curve would consist of a

Accepted Answer

A)  positive relationship between deviations from trend in real and nominal interest rates. 
B)  negative relationship between deviations from trend in real and nominal interest rates. 
C)  positive relationship between deviations from trend in the level of prices and the level of aggregate economic activity. 
D)  negative relationship between deviations from trend in the level of prices and the level of aggregate economic activity. 
E)  relationship between lagging and leading indicators. 
A)  positive relationship between deviations from trend in real and nominal interest rates. 
B)  negative relationship between deviations from trend in real and nominal interest rates. 
C)  positive relationship between deviations from trend in the level of prices and the level of aggregate economic activity. 
D)  negative relationship between deviations from trend in the level of prices and the level of aggregate economic activity. 
E)  relationship between lagging and leading indicators.

Question 20

Why is forecasting GDP over the long term so difficult?

Accepted Answer

There are many variables that influence

A business cycle trough is a

If the correlation coefficient between x and y is equal to -1,we say that x and y are

Comovement can be discerned by

Which of the following is a feature of recent Canadian business cycles?

If the correlation coefficient between x and y is equal to 1,we say that x and y are

Investment tends to be a

Robert Lucas has popularized the notion that with respect to

If the deviations from trend in a macroeconomic variable is neither procyclical not countercyclical,it is

Positive correlation between x and y implies that

Real investment tends to be

Difficulties in determining the cyclical pattern in real wage rates from aggregate data are primarily due to biases due to

Average labour productivity tends to be

A measure of the degree of correlation between two variables is a

The defining feature of business cycles is that they

The Great Moderation best applies to the behaviour of which series in Canada?

If the correlation between GDP and y is -0.75,we say y is

Business cycle persistence refers to the property that

An example of a statistical model is the

A reverse Phillips Curve would consist of a

Why is forecasting GDP over the long term so difficult?

Introduction

Measurement

Consumer and Firm Behavior: The Work–Leisure Decision and Profit Maximization

A Closed-Economy One-Period Macroeconomic Model

Search and Unemployment

Economic Growth: Malthus and Solow

Income Disparity Among Countries and Endogenous Growth

A Two-Period Model: The Consumption–Savings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model with Investment

Money, Banking, Prices, and Monetary Policy

Business Cycle Models with Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

Inflation: Phillips Curves and Neo-Fisherism

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking: A Deeper Look

Filters

Exam 3: Business Cycle Measurement

A business cycle trough is a

If the correlation coefficient between x and y is equal to -1,we say that x and y are

Comovement can be discerned by

Which of the following is a feature of recent Canadian business cycles?

If the correlation coefficient between x and y is equal to 1,we say that x and y are

Investment tends to be a

Robert Lucas has popularized the notion that with respect to

If the deviations from trend in a macroeconomic variable is neither procyclical not countercyclical,it is

Positive correlation between x and y implies that

Real investment tends to be

Difficulties in determining the cyclical pattern in real wage rates from aggregate data are primarily due to biases due to

Average labour productivity tends to be

A measure of the degree of correlation between two variables is a

The defining feature of business cycles is that they

The Great Moderation best applies to the behaviour of which series in Canada?

If the correlation between GDP and y is -0.75,we say y is

Business cycle persistence refers to the property that

An example of a statistical model is the

A reverse Phillips Curve would consist of a

Why is forecasting GDP over the long term so difficult?

Introduction

Measurement

Consumer and Firm Behavior: The Work–Leisure Decision and Profit Maximization

A Closed-Economy One-Period Macroeconomic Model

Search and Unemployment

Economic Growth: Malthus and Solow

Income Disparity Among Countries and Endogenous Growth

A Two-Period Model: The Consumption–Savings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model with Investment

Money, Banking, Prices, and Monetary Policy

Business Cycle Models with Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

Inflation: Phillips Curves and Neo-Fisherism

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking: A Deeper Look

Filters