Econ 1040 Shambora – Flashcards
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Which of the following statements best depicts laypeople's explanation of the Great Depression at that time?
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An oversupply of goods had glutted the market.
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Which of the following was not a solution to the Great Depression favored by Classical economists?
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Hire unemployed workers for public works programs
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Classical economists are generally associated with:
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laissez faire.
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Keynesians:
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generally favor activist government policies.
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The two frameworks conventional economists generally use to analyze macroeconomic issues are:
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the short-run and the long-run frameworks.
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Classical economists believe that in the short-run, in the real world:
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prices and wages weren't flexible enough to bring about equilibrium.
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The secular trend growth rate in the United States is approximately:
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2.5 to 3.5 percent per year.
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Business cycles are generally considered in:
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the short-run framework.
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What turns a business cycle into a structural stagnation?
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A slow expansion that keeps the economy below trend.
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Policies that affect work, capital accumulation, and technological change are primarily relevant to:
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the long-run growth framework.
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Which of the following countries, or groups of countries, has grown at the fastest rate in the last twenty years?
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China.
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Fluctuations around the long-term growth rate are called:
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business cycles.
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The business cycle is:
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the term used to describe fluctuations in output around its long-term trend.
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In September 2010, the NBER's Business Cycle Dating Committee decided that the recession that began in December of 2007 had ended in July of 2009. The NBER does not use a popular definition of recession—two quarters of falling GDP—but looks at a variety of monthly statistics to date business cycles. Read the paragraph shown. In July 2009 a recession ended. In business cycle terminology, what does July 2009 mark?
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The trough of the cycle
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In September 2010, the NBER's Business Cycle Dating Committee decided that the recession that began in December of 2007 had ended in July of 2009. The NBER does not use a popular definition of recession—two quarters of falling GDP—but looks at a variety of monthly statistics to date business cycles. Read the paragraph shown. When the NBER says that a recession is over, what are they saying?
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Economic activity is no longer declining
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Which of the following statements best characterizes the Keynesian view of business cycles?
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Expansions and contractions of the business cycle are symptoms of underlying problems and should be dealt with through activist government policies.
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In order of their occurrence, the phases of the business cycle are:
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peak, downturn, trough, upturn.
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The business cycle consists of several stages or phases. Which is the accurate sequence?
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Recession, trough, expansion, peak
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A recession is often considered to be:
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an economic downturn that persists for more than two consecutive quarters of the year.
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The longest business-cycle expansion in U.S. history occurred during the ten years from:
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1991 until 2001.
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Most economists agree that during a depression:
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economic policy should be used to improve economic conditions.
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Changes in the institutional structure of the U.S. economy following the Great Depression:
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reduced the length of business cycles.
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Prior to the Industrial Revolution, unemployment was not generally considered a social problem because:
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a reduction in spending would cause wages and income to fall rather than unemployment to rise.
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Unemployment caused by people entering the job market and people quitting a job just long enough to look for and find another one is called:
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frictional unemployment.
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In contrast to a recession in industrialized nations, a recession in pre-industrial nations:
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is less visible in its effects on the unemployment rate but it has a larger effect on wage rates.
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In the early 2000s, the United States went through what many economists described as a jobless recovery, which is a situation in which real output grows but the unemployment rate does not fall. Normally, an increase in real output affects:
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cyclical unemployment more than structural unemployment.
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Another term for what the text calls the "target rate of unemployment" is:
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the natural rate of unemployment.
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Frictional unemployment is a result of:
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people quitting a job just long enough to look for and find another one.
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Frictional unemployment:
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comes from people constantly entering the labor force and changing jobs.
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Workers at a car-manufacturing plant are let go because automated machinery has been installed that requires fewer employees to operate. What type of unemployment describes the workers' situation?
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Structural unemployment
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The target rate of unemployment is defined as the:
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lowest sustainable rate of unemployment achievable under existing conditions.
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Which of the following institutional changes would tend to reduce the target rate of unemployment?
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An increased number of people reaching the age at which they are more employable
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If output is below potential output, it is most likely that the economy is:
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near a trough.
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Potential output in the long run:
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rises at a trend rate of 2.5 to 3.5 percent per year.
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