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Chapters
1. |
The trough of a business cycle occurs when _____ hits its lowest point. |
A. | inflation |
B. | the money supply |
C. | aggregate economic activity |
D. | the unemployment rate |
Answer» C. aggregate economic activity |
2. |
The low point in the business cycle is referred to as the |
A. | expansion. |
B. | boom. |
C. | trough. |
D. | peak. |
Answer» C. trough. |
3. |
When aggregate economic activity is increasing, the economy is said to be in |
A. | an expansion. |
B. | a contraction. |
C. | a peak. |
D. | a turning point. |
Answer» A. an expansion. |
4. |
In a boom: |
A. | Unemployment is likely to fall |
B. | Prices are likely to fall |
C. | Demand is likely to fall |
D. | Imports are likely to fall |
Answer» A. Unemployment is likely to fall |
5. |
Peaks and troughs of the business cycle are known collectively as |
A. | volatility. |
B. | turning points. |
C. | equilibrium points. |
D. | real business cycle events. |
Answer» B. turning points. |
6. |
When aggregate economic activity is declining, the economy is said to be in |
A. | a contraction. |
B. | an expansion. |
C. | a trough. |
D. | a turning point. |
Answer» A. a contraction. |
7. |
Industries that are extremely sensitive to the business cycle are the |
A. | durable goods and service sectors. |
B. | nondurable goods and service sectors. |
C. | capital goods and nondurable goods sectors. |
D. | capital goods and durable goods sectors. |
Answer» D. capital goods and durable goods sectors. |
8. |
Economists use the term shocks to mean |
A. | unexpected government actions that affect the economy. |
B. | typically, unpredictable forces that have major impacts on the economy. |
C. | sudden rises in oil prices. |
D. | the business cycles. |
Answer» B. typically, unpredictable forces that have major impacts on the economy. |
9. |
Primarily, macroeconomists use microeconomic principles to study |
A. | business cycles and trends in the stock market. |
B. | long-run economic growth and antitrust policies. |
C. | trends in the stock market and long-term economic growth. |
D. | long-run economic growth and business cycles. |
Answer» D. long-run economic growth and business cycles. |
10. |
The two most important American business cycle events of the twentieth century were |
A. | the Great Depression and stagflation. |
B. | World War II and the Great Depression. |
C. | the productivity slowdown and the Great Depression. |
D. | government budget deficits and World War II. |
Answer» B. World War II and the Great Depression. |
11. |
According to real business cycle theory, the primary causes of business cycles are |
A. | shocks to aggregate demand. |
B. | monetary factors. |
C. | technology shocks. |
D. | waves of self-fulfilling optimism and pessimism. |
Answer» C. technology shocks. |
12. |
The macroeconomic models that are most supportive of the role of government policy aimed at smoothing business cycles are |
A. | real business cycle models. |
B. | endogenous growth models. |
C. | Keynesian models. |
D. | growth models. |
Answer» C. Keynesian models. |
13. |
Business cycles are |
A. | each unique, but all have a single cause. |
B. | each unique and they can have many causes. |
C. | similar, and they all have a single cause. |
D. | similar, but they can have many causes. |
Answer» D. similar, but they can have many causes. |
14. |
In the long run, inflation is caused by |
A. | aggressive labour unions. |
B. | greedy monopolists. |
C. | growth in the money supply. |
D. | global warming. |
Answer» C. growth in the money supply. |
15. |
in order to influence spending on goods and services in the short-run, monetary policy is directed at directly influencing... |
A. | unemployment rates. |
B. | inflation rates. |
C. | interest rates. |
D. | economic growth rates. |
Answer» B. inflation rates. |
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