Deck 41: How to Measure Instability

Question 1

Whats defention of terms:
-Amplitude

Answer 1

the amount of rise in the expansion and the amount of decline in the contraction

Question 2

Whats defention of terms:
-business cycle

Answer 2

the rise of the economy from trough to peak, as well as the following decline from peak to trough

Question 3

Whats defention of terms:
-business cycle peak

Answer 3

highest point in the business cycle as measured by business indicators

Question 4

Whats defention of terms:
-business cycle trough

Question 5

Whats defention of terms:
-cycle base

Question 6

Whats defention of terms:
-cycle relative

Question 7

Explain how to find the peaks and troughs of the business cycle.
-How are the peaks and troughs of the business cycle measured?

Question 8

Explain how to find the peaks and troughs of the business cycle.
-What is an expansion? What is a contraction?

Question 9

Explain how to find the peaks and troughs of the business cycle.
-How does unemployment behave over the business cycle?

Question 10

Explain how to find the peaks and troughs of the business cycle.
-What happens to capacity utilization over the business cycle?

Question 11

Explain how to measure the path of any economic series over the cycle.
-What is a cycle base? Explain how to find a cycle base.

Question 12

Explain how to measure the path of any economic series over the cycle.
-What is a cycle relative? Explain how to find a cycle relative.

Question 13

Explain how to measure the path of any economic series over the cycle.
-Explain how to calculate the percentage of expansion and the percentage of ?contraction?

Question 14

Explain how to measure the path of any economic series over the cycle.
-Name one economic series that rises in every expansion and falls in every contraction. Explain this behavior.

Question 15

Explain how to measure the path of any economic series over the cycle.
-Name one economic series that falls in expansion and rises in contraction. Explain this behavior.

Question 16

Describe measuring how much an economic series rises from trough to peak and falls from peak to trough.
-What is a cycle relative and how is it calculated?

Question 17

Wesley Mitchell coined the concept of a cycle relative. What is a cycle relative?

A) The cycle relative is defined as the average of an economic series for one whole cycle.
B) The cycle relative is defined as the original data in a stage divided by the number of stages.
C) The cycle relative is defined as the original data in a stage divided by the cycle base.
D) The cycle relative is defined as the relative number of stages in a cycle.

Question 18

What is meant by capacity utilization?

A) How much productive capacity can be effectively utilized.
B) How much productive capacity is currently being utilized.
C) The average utilization of capacity over the business cycle.
D) The capacity for utilizing something.

Question 19

Many economists argue that the unemployment rate tends to understate the actual amount of unemployment. Why?

A) The unemployment rate excludes persons who work in the service sector.
B) The unemployment rate excludes persons who are unable to find work.
C) The unemployment rate excludes persons who want to work but have given up looking for a job.
D) The unemployment rate excludes workers who are also students.

Question 20

Wesley Mitchell divided the business cycle into 9 stages. Mitchell called the lowest stages of the cycle

A) the initial peak and the initial contraction.
B) the initial trough and the final trough.
C) the cycle relative and the cycle base.
D) the amplitude and the capacity.

Question 21

What is meant by the cycle base?

A) the original data in a stage divided by the cycle relative.
B) the capacity utilization during the initial trough.
C) the average of an economic series for one whole cycle.
D) the lowest point of the cycle.

Question 22

-Table 41a gives quarterly GDP data for a complete business cycle. Using Mitchell's terminology, what is the value for Stage 1?

A) $3,759.8 billion
B) $4,237.6 billion
C) $4,373.3 billion
D) $4,147.5 billion

Question 23

-Table 41a gives quarterly GDP data for a complete business cycle. Using Mitchell's terminology, what is the value for the cycle base?

A) $3,759.8 billion
B) $4,237.6 billion
C) $4,373.3 billion
D) $4,147.5 billion

Question 24

-Table 41a gives quarterly GDP data for a complete business cycle. Using Mitchell's terminology, what is the value for Stage 5?

A) $3,759.8 billion
B) $4,237.6 billion
C) $4,373.3 billion
D) $4,147.5 billion

Question 25

-Table 41a gives quarterly GDP data for a complete business cycle. Using Mitchell's terminology, what is the value for Stage 9?

A) $3,759.8 billion
B) $4,237.6 billion
C) $4,373.3 billion
D) $4,147.5 billion

Question 26

-Table 41a gives quarterly GDP data for a complete business cycle. Using Mitchell's terminology, what is the value for the cycle relative in Stage 1?

A) 105.4
B) 90.6
C) 86.2
D) 55.1