Question 1

Generally,in a recession,more homes are built.

Accepted Answer

A) True 
 B)False

Question 2

When actual GDP goes below potential GDP,it means that

Accepted Answer

A)  Economic activity has increased. 
B)  Inflation is imminent. 
C)  Economic activity has slowed. 
D)  Deflation is imminent. 
A)  Economic activity has increased. 
B)  Inflation is imminent. 
C)  Economic activity has slowed. 
D)  Deflation is imminent.

Question 3

When the economy is operating at potential GDP,the rate of inflation is

Accepted Answer

A)  rising. 
B)  neither rising nor falling. 
C)  falling. 
D)  causing aggregate demand to fall while supply rises. 
A)  rising. 
B)  neither rising nor falling. 
C)  falling. 
D)  causing aggregate demand to fall while supply rises.

Question 4

What is the definition of the natural rate of unemployment?

Accepted Answer

The natural rate of employment is the em

Question 5

The date a recession bottoms out is called the

Accepted Answer

A)  peak. 
B)  expansion. 
C)  trough. 
D)  equilibrium. 
A)  peak. 
B)  expansion. 
C)  trough. 
D)  equilibrium.

Question 6

When there is a negative output gap,the unemployment rate

Accepted Answer

A)  rises. 
B)  remains steady. 
C)  is also negative. 
D)  is less reliable. 
A)  rises. 
B)  remains steady. 
C)  is also negative. 
D)  is less reliable.

Question 7

Problems in _____________ are another possible cause of recessions.

Accepted Answer

A)  agricultural markets 
B)  financial markets 
C)  aggregate inputs 
D)  intermediate input markets 
A)  agricultural markets 
B)  financial markets 
C)  aggregate inputs 
D)  intermediate input markets

Question 8

Which of the following is the formula for the potential growth rate?

Accepted Answer

A)  The potential growth rate equals the long-term labor force growth rate plus the long-term productivity growth rate. 
B)  The potential growth rate equals the short-term growth rate plus the long-term aggregate productivity growth rate. 
C)  The potential growth rate equals the short-term growth rate plus the long-term productivity growth rate. 
D)  The potential growth rate equals the short-term aggregate growth rate minus the long-term productivity growth rate. 
A)  The potential growth rate equals the long-term labor force growth rate plus the long-term productivity growth rate. 
B)  The potential growth rate equals the short-term growth rate plus the long-term aggregate productivity growth rate. 
C)  The potential growth rate equals the short-term growth rate plus the long-term productivity growth rate. 
D)  The potential growth rate equals the short-term aggregate growth rate minus the long-term productivity growth rate.

Question 9

An important cause of recessions is an unexpected negative supply shift,such as higher oil prices.

Accepted Answer

A) True 
 B)False

Question 10

What will happen in an economy if the actual GDP is too high relative to the potential GDP?

Accepted Answer

If actual productivity is higher than po

Question 11

Cyclical unemployment happens because

Accepted Answer

A)  businesses make strategic errors. 
B)  of government intervention 
C)  inflation rates vary. 
D)  of the ups and downs of the business cycle. 
A)  businesses make strategic errors. 
B)  of government intervention 
C)  inflation rates vary. 
D)  of the ups and downs of the business cycle.

Question 12

During a recession,business profits decline.

Accepted Answer

A) True 
 B)False

Question 13

The National Bureau of Economic Research decides the official start and end dates for a recession.

Accepted Answer

A) True 
 B)False

Question 14

The underemployed are those people who are

Accepted Answer

A)  working at a lower skill level so they can earn money while looking for a better job. 
B)  working full-time but want to work only part-time. 
C)  not looking for work actively enough to be considered unemployed. 
D)  unemployed due to the ups and downs of the business cycle. 
A)  working at a lower skill level so they can earn money while looking for a better job. 
B)  working full-time but want to work only part-time. 
C)  not looking for work actively enough to be considered unemployed. 
D)  unemployed due to the ups and downs of the business cycle.

Question 15

If the NAIRU was 4.8% in 2002 and the actual unemployment rate was 5.8%,what percentage of the labor force could have been put to work without exerting upward pressure on inflation?

Accepted Answer

A)  1%. 
B)  10.6%. 
C)  1.2%. 
D)  5.3%. 
A)  1%. 
B)  10.6%. 
C)  1.2%. 
D)  5.3%.

Question 16

Potential GDP is the maximum amount of economic output an economy can sustain at any moment without

Accepted Answer

A)  causing frictional unemployment. 
B)  raising unemployment levels. 
C)  decreasing the inflation rate. 
D)  increasing the inflation rate. 
A)  causing frictional unemployment. 
B)  raising unemployment levels. 
C)  decreasing the inflation rate. 
D)  increasing the inflation rate.

Question 17

An example of a generally recession-resistant business is

Accepted Answer

A)  consumer electronics. 
B)  health care. 
C)  automobiles. 
D)  boats. 
A)  consumer electronics. 
B)  health care. 
C)  automobiles. 
D)  boats.

Question 18

The pattern of recession,recovery,and expansion is known as the

Accepted Answer

A)  economic cycle. 
B)  inflationary cycle. 
C)  deflationary cycle. 
D)  business cycle. 
A)  economic cycle. 
B)  inflationary cycle. 
C)  deflationary cycle. 
D)  business cycle.

Question 19

What does the phrase "wages are sticky" mean?

Accepted Answer

A)  Wages never change. 
B)  It is difficult to change wages in the short term. 
C)  Wages are always changing. 
D)  Wages stick to unemployment rates. 
A)  Wages never change. 
B)  It is difficult to change wages in the short term. 
C)  Wages are always changing. 
D)  Wages stick to unemployment rates.

Question 20

Which person provides an example of structural unemployment?

Accepted Answer

A)  A worker who stays at home to tend to children. 
B)  A worker trained in running an obsolete machine. 
C)  A student who goes to school instead of working. 
D)  A fast-food worker who quits that job to find a better-paying job. 
A)  A worker who stays at home to tend to children. 
B)  A worker trained in running an obsolete machine. 
C)  A student who goes to school instead of working. 
D)  A fast-food worker who quits that job to find a better-paying job.

Generally,in a recession,more homes are built.

When actual GDP goes below potential GDP,it means that

When the economy is operating at potential GDP,the rate of inflation is

What is the definition of the natural rate of unemployment?

The date a recession bottoms out is called the

When there is a negative output gap,the unemployment rate

Problems in _____________ are another possible cause of recessions.

Which of the following is the formula for the potential growth rate?

An important cause of recessions is an unexpected negative supply shift,such as higher oil prices.

What will happen in an economy if the actual GDP is too high relative to the potential GDP?

Cyclical unemployment happens because

During a recession,business profits decline.

The National Bureau of Economic Research decides the official start and end dates for a recession.

The underemployed are those people who are

If the NAIRU was 4.8% in 2002 and the actual unemployment rate was 5.8%,what percentage of the labor force could have been put to work without exerting upward pressure on inflation?

Potential GDP is the maximum amount of economic output an economy can sustain at any moment without

An example of a generally recession-resistant business is

The pattern of recession,recovery,and expansion is known as the

What does the phrase "wages are sticky" mean?

Which person provides an example of structural unemployment?

Introduction

Demand and Supply: The Basics of the Market Economy

Market Equilibrium and Shifts

How Businesses Work

Competition and Market Power

Government and the Economy

The First Step Into Macroeconomics

Inflation

Growth

Fiscal Policy

Monetary Policy

The Financial Markets

International Trade

Technological Change

Economics of the Labor Market

The Distribution of Income

Economics of Retirement and Healthcare

Economics of Energy, the Environment, and Global Climate Change Glossary

Filters

Exam 10: Business Cycles, unemployment and Inflation

Generally,in a recession,more homes are built.

When actual GDP goes below potential GDP,it means that

When the economy is operating at potential GDP,the rate of inflation is

What is the definition of the natural rate of unemployment?

The date a recession bottoms out is called the

When there is a negative output gap,the unemployment rate

Problems in _____________ are another possible cause of recessions.

Which of the following is the formula for the potential growth rate?

An important cause of recessions is an unexpected negative supply shift,such as higher oil prices.

What will happen in an economy if the actual GDP is too high relative to the potential GDP?

Cyclical unemployment happens because

During a recession,business profits decline.

The National Bureau of Economic Research decides the official start and end dates for a recession.

The underemployed are those people who are

If the NAIRU was 4.8% in 2002 and the actual unemployment rate was 5.8%,what percentage of the labor force could have been put to work without exerting upward pressure on inflation?

Potential GDP is the maximum amount of economic output an economy can sustain at any moment without

An example of a generally recession-resistant business is

The pattern of recession,recovery,and expansion is known as the

What does the phrase "wages are sticky" mean?

Which person provides an example of structural unemployment?

Introduction

Demand and Supply: The Basics of the Market Economy

Market Equilibrium and Shifts

How Businesses Work

Competition and Market Power

Government and the Economy

The First Step Into Macroeconomics

Inflation

Growth

Fiscal Policy

Monetary Policy

The Financial Markets

International Trade

Technological Change

Economics of the Labor Market

The Distribution of Income

Economics of Retirement and Healthcare

Economics of Energy, the Environment, and Global Climate Change Glossary

Filters