Question 1

How is a recession "officially" determined?

Accepted Answer

It is determined by the Business Cycle D

Question 2

Generally speaking, the rate of inflation ________ during a recession.

Accepted Answer

A)  stays the same 
B)  falls 
C)  rises 
D)  falls, then rises 
E)  None of these answers is correct. 
A)  stays the same 
B)  falls 
C)  rises 
D)  falls, then rises 
E)  None of these answers is correct.

Question 3

Refer to the following figure when answering the following questions.
Figure 9.1: Output versus Time

-Considering Figure 9.1:

Accepted Answer

A)  area a is where current output is less than potential output, and area b is where current output is greater than potential output. 
B)  area a is where current output is greater than potential output, and area b is where current output is less than potential output. 
C)  point c is where economic fluctuations are zero, and at point b, the economy is in a boom. 
D)  at point c, current output equals the short-term fluctuations. 
E)  area a is where current output is greater than potential output, and at point c, the economy is in a boom. 
A)  area a is where current output is less than potential output, and area b is where current output is greater than potential output. 
B)  area a is where current output is greater than potential output, and area b is where current output is less than potential output. 
C)  point c is where economic fluctuations are zero, and at point b, the economy is in a boom. 
D)  at point c, current output equals the short-term fluctuations. 
E)  area a is where current output is greater than potential output, and at point c, the economy is in a boom.

Question 4

Refer to the following figure to answer the following questions.
Figure 9.3: Percent Change in U.S. Employment: 1980-2015  
-Based on the data presented in Figure 9.3, which of the following periods is/are likely (an) expansion(s)?

Accepted Answer

A)  1988, 2006, and 2014 
B)  1988 and 2014 
C)  1981, 1990, and 2001 
D)  2002 
E)  Not enough information is given. 
A)  1988, 2006, and 2014 
B)  1988 and 2014 
C)  1981, 1990, and 2001 
D)  2002 
E)  Not enough information is given.

Question 5

If   
, the macroeconomy is producing at its potential level of output.

Accepted Answer

A) True 
 B)False

Question 6

Which is responsible for dating business cycles?

Accepted Answer

A)  Business Cycle Committee of the National Bureau of Economic Research 
B)  Business Cycle Committee of the Department of Treasury 
C)  Department of Treasury 
D)  Commerce Department 
E)  Board of Governors of the Federal Reserve System 
A)  Business Cycle Committee of the National Bureau of Economic Research 
B)  Business Cycle Committee of the Department of Treasury 
C)  Department of Treasury 
D)  Commerce Department 
E)  Board of Governors of the Federal Reserve System

Question 7

Which is responsible for dating business cycles?

Accepted Answer

A)  Congressional Budget Office 
B)  Business Cycle Committee of the National Bureau of Economic Research 
C)  President's Council of Economic Advisors 
D)  New York City Federal Reserve Bank president 
E)  Board of Governors of the Federal Reserve System 
A)  Congressional Budget Office 
B)  Business Cycle Committee of the National Bureau of Economic Research 
C)  President's Council of Economic Advisors 
D)  New York City Federal Reserve Bank president 
E)  Board of Governors of the Federal Reserve System

Question 8

According to Okun's law, if the Federal Reserve wants to reduce unemployment, it should ________ interest rates, which would ________ output.

Accepted Answer

A)  reduce; reduce 
B)  increase; increase 
C)  reduce; increase 
D)  reduce; not change 
E)  not change; increase 
A)  reduce; reduce 
B)  increase; increase 
C)  reduce; increase 
D)  reduce; not change 
E)  not change; increase

Question 9

Refer to the following figure when answering the following questions.
Figure 9.2: U.S. Output Fluctuations 1960-2015   
-Consider Figure 9.2. In approximately what years did the U.S. economy experience its longest economic expansion?

Accepted Answer

A)  1964-1970 
B)  1978-1980 
C)  1996-2001 
D)  1972-1974 
E)  This cannot be determined from the information given. 
A)  1964-1970 
B)  1978-1980 
C)  1996-2001 
D)  1972-1974 
E)  This cannot be determined from the information given.

Question 10

Refer to the following figure when answering the following questions.
Figure 9.5: U.S. Inflation 1960-2015   (Source: Bureau of Labor Statistics)
-Consider Figure 9.5, which shows the annual inflation rate. According to the Phillips curve, the period from about 1998 to 2000 was a period of:

Accepted Answer

A)  stagnation. 
B)  a slumping economy. 
C)  a booming economy. 
D)  None of these answers is correct. 
E)  Not enough information is given. 
A)  stagnation. 
B)  a slumping economy. 
C)  a booming economy. 
D)  None of these answers is correct. 
E)  Not enough information is given.

Question 11

If   , the macroeconomy is:

Accepted Answer

A)  in an expansionary gap. 
B)  in a recessionary gap. 
C)  at its potential level of output. 
D)  Not enough information is given. 
E)  None of these answers is correct. 
A)  in an expansionary gap. 
B)  in a recessionary gap. 
C)  at its potential level of output. 
D)  Not enough information is given. 
E)  None of these answers is correct.

Question 12

Figure 9.8: Cyclical Unemployment: 1980-2015   (Source: Federal Reserve Economic Data, St. Louis Federal Reserve)
-The figure above shows cyclical unemployment for the years 1980-2015. Using your best guess by looking at the figure, what was the output gap in 1992, 2003, 2010, and 2015? What is the change in inflation for those years?

Accepted Answer

To answer the first part of the question

Question 13

Refer to the following figure when answering the following questions.
Figure 9.2: U.S. Output Fluctuations 1960-2015   
-Consider Figure 9.2. In approximately which of the following years was current output equal to potential output?

Accepted Answer

A)  1966, 1974, 1979, 2000, and 2004 
B)  1961, 1975, 1983, 2002, and 2009 
C)  1963, 1970, 1974, 1985, 1998, 2001, and 2005 
D)  1961, 1975, 1979, 2000, and 2008 
E)  1966, 1974, 1983, 2002, and 2010 
A)  1966, 1974, 1979, 2000, and 2004 
B)  1961, 1975, 1983, 2002, and 2009 
C)  1963, 1970, 1974, 1985, 1998, 2001, and 2005 
D)  1961, 1975, 1979, 2000, and 2008 
E)  1966, 1974, 1983, 2002, and 2010

How is a recession "officially" determined?

Generally speaking, the rate of inflation ________ during a recession.

Refer to the following figure when answering the following questions. Figure 9.1: Output versus Time -Considering Figure 9.1:

Refer to the following figure to answer the following questions. Figure 9.3: Percent Change in U.S. Employment: 1980-2015 -Based on the data presented in Figure 9.3, which of the following periods is/are likely (an) expansion(s)?

If , the macroeconomy is producing at its potential level of output.

Which is responsible for dating business cycles?

Which is responsible for dating business cycles?

According to Okun's law, if the Federal Reserve wants to reduce unemployment, it should interest rates, which would output.

Refer to the following figure when answering the following questions. Figure 9.2: U.S. Output Fluctuations 1960-2015 -Consider Figure 9.2. In approximately what years did the U.S. economy experience its longest economic expansion?

Refer to the following figure when answering the following questions. Figure 9.5: U.S. Inflation 1960-2015 (Source: Bureau of Labor Statistics) -Consider Figure 9.5, which shows the annual inflation rate. According to the Phillips curve, the period from about 1998 to 2000 was a period of:

If , the macroeconomy is:

Refer to the following figure when answering the following questions. Figure 9.2: U.S. Output Fluctuations 1960-2015 -Consider Figure 9.2. In approximately which of the following years was current output equal to potential output?

Introduction to Macroeconomics

Measuring the Macroeconomy

An Overview of Long-Run Economic Growth

A Model of Production

The Solow Growth Model

Growth and Ideas

The Labor Market, Wages, and Unemployment

Inflation

The Great Recession: a First Look

The Is Curve

Monetary Policy and the Phillips Curve

Stabilization Policy and the Asad Framework

The Great Recession and the Short-Run Model

Dsge Models: the Frontier of Business Cycle Research

Consumption

Investment

The Government and the Macroeconomy

International Trade

Exchange Rates and International Finance

Parting Thoughts

Filters

Exam 9: An Introduction to the Short Run

How is a recession "officially" determined?

Generally speaking, the rate of inflation ________ during a recession.

Refer to the following figure when answering the following questions. Figure 9.1: Output versus Time -Considering Figure 9.1:

Refer to the following figure to answer the following questions. Figure 9.3: Percent Change in U.S. Employment: 1980-2015 -Based on the data presented in Figure 9.3, which of the following periods is/are likely (an) expansion(s)?

If , the macroeconomy is producing at its potential level of output.

Which is responsible for dating business cycles?

Which is responsible for dating business cycles?

According to Okun's law, if the Federal Reserve wants to reduce unemployment, it should ________ interest rates, which would ________ output.

Refer to the following figure when answering the following questions. Figure 9.2: U.S. Output Fluctuations 1960-2015 -Consider Figure 9.2. In approximately what years did the U.S. economy experience its longest economic expansion?

Refer to the following figure when answering the following questions. Figure 9.5: U.S. Inflation 1960-2015 (Source: Bureau of Labor Statistics) -Consider Figure 9.5, which shows the annual inflation rate. According to the Phillips curve, the period from about 1998 to 2000 was a period of:

If , the macroeconomy is:

Refer to the following figure when answering the following questions. Figure 9.2: U.S. Output Fluctuations 1960-2015 -Consider Figure 9.2. In approximately which of the following years was current output equal to potential output?

Introduction to Macroeconomics

Measuring the Macroeconomy

An Overview of Long-Run Economic Growth

A Model of Production

The Solow Growth Model

Growth and Ideas

The Labor Market, Wages, and Unemployment

Inflation

The Great Recession: a First Look

The Is Curve

Monetary Policy and the Phillips Curve

Stabilization Policy and the Asad Framework

The Great Recession and the Short-Run Model

Dsge Models: the Frontier of Business Cycle Research

Consumption

Investment

The Government and the Macroeconomy

International Trade

Exchange Rates and International Finance

Parting Thoughts

Filters

According to Okun's law, if the Federal Reserve wants to reduce unemployment, it should interest rates, which would output.