BUSINESS CYCLE

1. Economists refer to fluctuations in output as the “business cycle’ because movements in

output are regular and predictable
 False
2. Investment is a particularly volatile component of spending across the business cycle
(đầu tư là một thành phần chi tiêu đặc biệt dễ biến động trong chu kỳ kinh doanh)
 True
3. What happens to safe assets during a boom?
 Prices decrease, yields increase
4. What happens to riskier assets during a boom?
 Prices increase
5. Which of the following rules is most commonly used to determine when a recession
starts? Recessions start when:
 Real GDP has two consecutive quarters of negative growth (2 quý tang trưởng âm liên
tiếp)
6. Which variables would you consider in estimating peaks and troughs of a country’s
business cycles:
 Unemployment, GDP growth, industrial production, and inflation
7. Which of the following causes shifts of the AD curve:
 A change in household wealth
8. Which of the following would not cause a shift in the long-run aggregate supply curve?
 An increase in price expectations
9. In the model of AD and AS, the initial impact of an increase in consumer optimism is to:
 Shift the AD curve to the right
10. Though a small part of the overall economy, inventories can reflect growth significantly
because they:
 Tend to move forcefully up or down
11. Inventories tend to rise when:
 Inventory-to-sales ratios are low
12. Inventories will often fall early in a recovery because:
 Sales outstrip production
13. Durable goods have the most pronounced cyclical behavior because:
 They have longer useful lives
14. Housing is more sensitive than other sectors of the economy to:
 Interest rate
15. Comparisons of unemployment among countries:
 Must take into account different unemployment measurement methods
16. Unemployment frequently lags the business cycle because:
 Businesses are reluctant to dismiss and hire workers
17. Productivity offers perspective on the business cycle by:
 Measuring the intensity of workflow for existing employees
18. What are the signs of a price-wage spiral in the making:
 Both high inflation and sharp tightening of monetary policy
19. Johan just lost his job as a research scientist and immediately takes a part-time job at
McDonald’s until he can find another job in his field:
 U-rate unchanged
20. Does the u-rate in the previous question correctly describe what happen in the labor
market?
 No
21. During a deflation period:
 The real cost of borrowing increases
22. The main difference between RBC and Keynesian model is that the RBC model:
 Assumes that prices adjust quickly to changes while Keynesians do not
23. The Keynesian model is based on (1) expectation while RBC is based on (2)
expectation:
 Adaptive rational
24. In Keynesian model, the SRAS is (1) while in RBC it is (2):
 Horizontal, vertical
25. According to RBC theory, a person is unemployed because:
 He does not want to work
26. According to new Keynesian models, on output, the unanticipated shocks cause:
 Bigger effects than anticipated shocks
27. Which theory does not count the impact of money?
 RBC
28. What is the impulse of cycle according to new classical theory:
 Unanticipated fluctuations in AD
29. Compared to RBC, new Keynesian theories consider that prices are:
 More sticky
30. The dominant model used to analyze business model in recent time is:
 New Keynesian theory
31. In RBC theory, an expansionary policy will lead to:
 Higher inflation, same output