question

Recurring upswings and downswings in an economy's real GDP over time are called:

answer

business cycle

question

In the United States, business cycles have occurred against a backdrop of a long-run trend of

answer

. rising real GDP

question

Most economists agree that the immediate determinant of the volume of output and employment is the

answer

. level of total spending

question

As it relates to economic growth, the term long-run trend refers to:

answer

the long-term expansion or contraction of business activity that occurs over 50 or 100 years.

question

8. During a severe recession, we would expect output to fall the most in

answer

the construction industry.

question

The phase of the business cycle in which real GDP declines is called

answer

a recession.

question

The phase of the business cycle in which real GDP is at a minimum is called

answer

the trough

question

A recession is defined as a period in which

answer

real domestic output falls.

question

. In which phase of the business cycle will the economy most likely experience rising real output and falling unemployment rates?

answer

expansion

question

Which of the following statements is true about causes of business cycle fluctuations?

answer

There are a wide range of theories as to the underlying causes of business cycle movements

question

What is the primary reason that changes in total spending lead to cyclical changes in output and employment?

answer

. Prices are sticky in the short run

question

. Innovations such as the microchip and the Internet lead to business cycle variations because:

answer

significant innovations occur irregularly and unexpectedly

question

Which of the following would most likely move the economy into a recession in the short term?

answer

The central bank printing less money than was anticipated.

question

137. Refer to the above information. The labor force in Scoob is:

answer

102 million

question

. Refer to the above information. The unemployment rate in Scoob is

answer

6.9%

question

Refer to the above information. If the natural rate of unemployment in Scoob is 5 percent, then

answer

cyclical unemployment is about 2 percent.

question

. The United States' economy is considered to be at full employment when:

answer

about 4-5 percent of the labor force is unemployed

question

Kara voluntarily quit her job as an insurance agent to return to school full-time to earn an MBA degree. With degree in hand she is now searching for a position in management. Kara presently is

answer

frictionally unemployed

question

According to the Bureau of Labor Statistics, to be officially unemployed a person must:

answer

. be in the labor force

question

. The labor force includes

answer

employed workers and persons who are officially unemployed

question

The unemployment rate of:

answer

. teenagers is much higher than that of adults

question

Part-time workers are counted as:

answer

fully employed and therefore the official unemployment rate may understate the level of unemployment.

question

The unemployment rate is the

answer

percentage of the labor force that is unemployed.

question

Which of the following is correct?

answer

. The unemployment rates of men and women workers are roughly the same

question

. Structural unemployment

answer

. may involve a locational mismatch between unemployed workers and job openings

question

The type of unemployment associated with recessions is called

answer

cyclical unemployment.

question

Suppose there are 10 million part-time workers and 90 million full-time workers in an economy. Five million of the part-time workers switch to full-time work. As a result:

answer

the official unemployment rate will remain unchanged

question

Answer the question on the basis of the following information about a hypothetical economy: 151. Refer to the above information. The unemployment rate is:

answer

12.5%

question

Refer to the above information. If the members of the underground economy are presently counted as part of the unemployed when in fact they are employed, the official unemployment rate is overstated by about:

answer

4% points

question

Refer to the above information. The rate of inflation:

answer

cannot be determined from info

question

If actual GDP is $340 billion and there is a positive GDP gap of $20 billion, potential GDP is:

answer

$320 billion

question

. If potential GDP is $400 billion and there is a negative GDP gap of $15 billion, real GDP is:

answer

$385 bill

question

. Assume the natural rate of unemployment in the U.S. economy is 5 percent and the actual rate of unemployment is 9 percent. According to Okun's law, the negative GDP gap as a percent of potential GDP is

answer

8%

question

Okun's law

answer

shows the relationship between the unemployment rate and the size of the negative GDP gap.

question

The annual rate of inflation can be found by subtracting:

answer

last year's price index from this year's price index and dividing the difference by last year's price index.

question

If the Consumer Price Index rises from 300 to 333 in a particular year, the rate of inflation in that year is:

answer

11%

question

. Demand-pull inflation

answer

occurs when total spending exceeds the economy's ability to provide output at the existing price level.

question

Inflation initiated by increases in wages or other resource prices is labele

answer

. cost-push inflation

question

Cost-push inflation may be caused by:

answer

a negative supply shock

question

Which of the following formulas is correct? Percentage change in

answer

real income approximates percentage change in nominal income minus percentage change in price level.

question

Real income can be determined by

answer

deflating nominal income for inflation

question

Cost-of-living adjustment clauses (COLAs):

answer

tie wage increases to changes in the price level.

Macro chap 9 – Flashcards

Unlock all answers in this set

Haven't found what you were looking for?

Search for samples, answers to your questions and flashcards