Question 1

The defining feature of business cycles is that they are

Accepted Answer

A)  changes in the trend component of real GDP. 
B)  fluctuations about trend in real GDP. 
C)  fluctuations about trend in the unemployment rate. 
D)  fluctuations about trend in the level of employment. 
E)  fluctuations about trend in standards of living. 
A)  changes in the trend component of real GDP. 
B)  fluctuations about trend in real GDP. 
C)  fluctuations about trend in the unemployment rate. 
D)  fluctuations about trend in the level of employment. 
E)  fluctuations about trend in standards of living.

Question 2

Real consumption 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 3

A business cycle peak 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.

Question 4

If we plotted the level of good cholesterol in the blood against the incidence of heart disease,we would observe a

Accepted Answer

A)  negative correlation. 
B)  positive correlation. 
C)  zero correlation. 
D)  an uncertain result. 
E)  time series. 
A)  negative correlation. 
B)  positive correlation. 
C)  zero correlation. 
D)  an uncertain result. 
E)  time series.

Question 5

The value of macroeconomic knowledge is in

Accepted Answer

A)  understanding macro phenomena and guiding policy. 
B)  producing forecasts. 
C)  accurately forcasting stock prices. 
D)  understanding firm level behaviour. 
E)  accurately predicting recessions. 
A)  understanding macro phenomena and guiding policy. 
B)  producing forecasts. 
C)  accurately forcasting stock prices. 
D)  understanding firm level behaviour. 
E)  accurately predicting recessions.

Question 6

In Canada,three important recessions occurred between

Accepted Answer

A)  1944-1946, 1951-1952, and 1962-1964. 
B)  1978-1979, 1984-1985, and 1988-1989. 
C)  1974-1975, 1981-1982, and 1990-1992. 
D)  1981-1982, 1996-1997, and 2003-2004. 
E)  1987-1988, 1994-1995, and 2002-2003. 
A)  1944-1946, 1951-1952, and 1962-1964. 
B)  1978-1979, 1984-1985, and 1988-1989. 
C)  1974-1975, 1981-1982, and 1990-1992. 
D)  1981-1982, 1996-1997, and 2003-2004. 
E)  1987-1988, 1994-1995, and 2002-2003.

Question 7

Why is forecasting GDP in the long run so difficult?

Accepted Answer

A)  There is no expertise in forecasting the long run trend in real GDP. 
B)  There is no regularity in the frequency and amplitude of fluctuations in real GDP. 
C)  These is an absence of data that provides any information on future trends. 
D)  Current models are not sophisticated enough to conduct this exercise. 
E)  Structural and statistical forecasting provide differing results. 
A)  There is no expertise in forecasting the long run trend in real GDP. 
B)  There is no regularity in the frequency and amplitude of fluctuations in real GDP. 
C)  These is an absence of data that provides any information on future trends. 
D)  Current models are not sophisticated enough to conduct this exercise. 
E)  Structural and statistical forecasting provide differing results.

Question 8

Comovement can be discussed by

Accepted Answer

A)  looking at the amplitude of the business cycle. 
B)  looking at the frequency of the business cycle. 
C)  looking at the peaks and troughs of the business cycle. 
D)  plotting the percentage deviations from trend in two economic variables. 
E)  economic forecasting models. 
A)  looking at the amplitude of the business cycle. 
B)  looking at the frequency of the business cycle. 
C)  looking at the peaks and troughs of the business cycle. 
D)  plotting the percentage deviations from trend in two economic variables. 
E)  economic forecasting models.

Question 9

Forecasting the future path of real GDP by exploiting past statistical relationships

Accepted Answer

A)  is never very reliable. 
B)  can be accomplished by the construction and use of an index of leading variables. 
C)  can be accomplished by the construction and use of an index of lagging variables. 
D)  can be accomplished by the construction and use of an index of coincident variables. 
E)  can only be accomplished if there is a perfectly positive correlation. 
A)  is never very reliable. 
B)  can be accomplished by the construction and use of an index of leading variables. 
C)  can be accomplished by the construction and use of an index of lagging variables. 
D)  can be accomplished by the construction and use of an index of coincident variables. 
E)  can only be accomplished if there is a perfectly positive correlation.

Question 10

If real GDP helps to predict the path of a particular macroeconomic variable,it is said to be a

Accepted Answer

A)  conventional variable. 
B)  coincident variable. 
C)  leading variable. 
D)  lagging variable. 
E)  correlated variable. 
A)  conventional variable. 
B)  coincident variable. 
C)  leading variable. 
D)  lagging variable. 
E)  correlated variable.

Question 11

Amplitude of the business cycle is

Accepted Answer

A)  the amount of volatility in the business during one year. 
B)  the size of the minimum deviation from trend. 
C)  where the turning points of the business cycle occur. 
D)  the size of the maximum deviation from trend. 
E)  the amount of employment and real GDP changes during one year. 
A)  the amount of volatility in the business during one year. 
B)  the size of the minimum deviation from trend. 
C)  where the turning points of the business cycle occur. 
D)  the size of the maximum deviation from trend. 
E)  the amount of employment and real GDP changes during one year.

Question 12

Inventory investment tends to be

Accepted Answer

A)  coincident. 
B)  leading. 
C)  lagging. 
D)  so unchanging that it is hard to classify. 
E)  procyclical. 
A)  coincident. 
B)  leading. 
C)  lagging. 
D)  so unchanging that it is hard to classify. 
E)  procyclical.

Question 13

For the period 1961-2011 in Canada,the price level was

Accepted Answer

A)  countercyclical. 
B)  bicyclical. 
C)  procyclical. 
D)  acyclical. 
E)  leading. 
A)  countercyclical. 
B)  bicyclical. 
C)  procyclical. 
D)  acyclical. 
E)  leading.

Question 14

One example of a Phillips Curve would be 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 a money price (the wage rate) 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)  positive relationship between deviations from trend in the level of prices and the level of aggregate economic activity. 
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 a money price (the wage rate) 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)  positive relationship between deviations from trend in the level of prices and the level of aggregate economic activity.

Question 15

For the period 1961-2011 in Canada,the price level

Accepted Answer

A)  was uncorrelated with real GDP. 
B)  led changes in real GDP. 
C)  was acyclical. 
D)  lagged changes in real GDP. 
E)  was coincident with changes in real GDP. 
A)  was uncorrelated with real GDP. 
B)  led changes in real GDP. 
C)  was acyclical. 
D)  lagged changes in real GDP. 
E)  was coincident with changes in real GDP.

Question 16

Average labour productivity is computed as the

Accepted Answer

A)  ratio of industrial production to the employment rate. 
B)  ratio of real output in manufacturing to the level of real GDP. 
C)  ratio of real GDP to the unemployment rate. 
D)  ratio of real GDP to the level of employment. 
E)  ratio of labour input to real GDP. 
A)  ratio of industrial production to the employment rate. 
B)  ratio of real output in manufacturing to the level of real GDP. 
C)  ratio of real GDP to the unemployment rate. 
D)  ratio of real GDP to the level of employment. 
E)  ratio of labour input to real GDP.

Question 17

If we plotted cigarettes smoked per year against the incidence of lung cancer,we would observe a

Accepted Answer

A)  negative correlation. 
B)  positive correlation. 
C)  zero correlation. 
D)  an uncertain result. 
E)  time series. 
A)  negative correlation. 
B)  positive correlation. 
C)  zero correlation. 
D)  an uncertain result. 
E)  time series.

Question 18

If deviations from trend in a macroeconomic variable are positively correlated with deviations from trend in real GDP,that variable is said to be

Accepted Answer

A)  useful in predicting future movements in real GDP. 
B)  procyclical. 
C)  countercyclical. 
D)  acyclical. 
E)  uncorrelated. 
A)  useful in predicting future movements in real GDP. 
B)  procyclical. 
C)  countercyclical. 
D)  acyclical. 
E)  uncorrelated.

Question 19

Seasonal adjustment in macroeconomic analysis

Accepted Answer

A)  is not usually important. 
B)  is not necessary because economic activity tends to be too irregular for data-adjustment purposes. 
C)  is often appropriate because most macroeconomic time-series exhibit predictable seasonal patterns. 
D)  cannot be done because seasonal variation in production is extremely volatile and unstable. 
E)  should never be done because is can mask important seasonal phenomena. 
A)  is not usually important. 
B)  is not necessary because economic activity tends to be too irregular for data-adjustment purposes. 
C)  is often appropriate because most macroeconomic time-series exhibit predictable seasonal patterns. 
D)  cannot be done because seasonal variation in production is extremely volatile and unstable. 
E)  should never be done because is can mask important seasonal phenomena.

Question 20

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

Accepted Answer

A)  procyclical. 
B)  countercyclical. 
C)  acyclical. 
D)  negatively correlated. 
E)  cyclical. 
A)  procyclical. 
B)  countercyclical. 
C)  acyclical. 
D)  negatively correlated. 
E)  cyclical.

The defining feature of business cycles is that they are

Real consumption tends to be

A business cycle peak is a

If we plotted the level of good cholesterol in the blood against the incidence of heart disease,we would observe a

The value of macroeconomic knowledge is in

In Canada,three important recessions occurred between

Why is forecasting GDP in the long run so difficult?

Comovement can be discussed by

Forecasting the future path of real GDP by exploiting past statistical relationships

If real GDP helps to predict the path of a particular macroeconomic variable,it is said to be a

Amplitude of the business cycle is

Inventory investment tends to be

For the period 1961-2011 in Canada,the price level was

One example of a Phillips Curve would be a

For the period 1961-2011 in Canada,the price level

Average labour productivity is computed as the

If we plotted cigarettes smoked per year against the incidence of lung cancer,we would observe a

If deviations from trend in a macroeconomic variable are positively correlated with deviations from trend in real GDP,that variable is said to be

Seasonal adjustment in macroeconomic analysis

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

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

The defining feature of business cycles is that they are

Real consumption tends to be

A business cycle peak is a

If we plotted the level of good cholesterol in the blood against the incidence of heart disease,we would observe a

The value of macroeconomic knowledge is in

In Canada,three important recessions occurred between

Why is forecasting GDP in the long run so difficult?

Comovement can be discussed by

Forecasting the future path of real GDP by exploiting past statistical relationships

If real GDP helps to predict the path of a particular macroeconomic variable,it is said to be a

Amplitude of the business cycle is

Inventory investment tends to be

For the period 1961-2011 in Canada,the price level was

One example of a Phillips Curve would be a

For the period 1961-2011 in Canada,the price level

Average labour productivity is computed as the

If we plotted cigarettes smoked per year against the incidence of lung cancer,we would observe a

If deviations from trend in a macroeconomic variable are positively correlated with deviations from trend in real GDP,that variable is said to be

Seasonal adjustment in macroeconomic analysis

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

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