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Full download Macroeconomics 9th Edition Abel Test Bank all chapter 2024 pdf
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Macroeconomics, 9e (Abel/Bernanke/Croushore)
Chapter 8 Business Cycles
1
Copyright © 2017 Pearson Education, Inc.
5) Business cycles all display the following characteristics except
A) a period of expansion followed by one of contraction.
B) comovement of many economic variables.
C) rising prices during an expansion and falling prices during the contraction.
D) they last a period of one to twelve years.
Answer: C
Diff: 2
Topic: Section: 8.1
Question Status: New
6) 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
Diff: 1
Topic: Section: 8.1
Question Status: Previous Edition
2
Copyright © 2017 Pearson Education, Inc.
9) The high point in the business cycle is referred to as the
A) turning point.
B) peak.
C) boom.
D) trough.
Answer: B
Diff: 1
Topic: Section: 8.1
Question Status: Previous Edition
11) 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
Diff: 1
Topic: Section: 8.1
Question Status: Previous Edition
3
Copyright © 2017 Pearson Education, Inc.
13) Who officially determines whether the economy is in a recession or expansion?
A) The president of the United States
B) The U.S. Congress
C) The Federal Reserve Board of Governors
D) The National Bureau of Economic Research
Answer: D
Diff: 1
Topic: Section: 8.1
Question Status: Previous Edition
14) Which group within the National Bureau of Economic Research officially determines
whether the economy is in a recession or expansion?
A) The G-4
B) The Business Cycle Dating Committee
C) The Business Cycle Governors
D) The Turning Point Group
Answer: B
Diff: 1
Topic: Section: 8.1
Question Status: Previous Edition
15) Research on the effects of recessions on the real level of GDP shows that
A) recessions cause only temporary reductions in real GDP, which are offset by growth during
the expansion phase.
B) recessions cause large, permanent reductions in the real level of GDP.
C) recessions cause both temporary and permanent declines in real GDP, but most of the decline
is temporary.
D) recessions cause both temporary and permanent declines in real GDP, but most of the decline
is permanent.
Answer: C
Diff: 1
Topic: Section: 8.1
Question Status: Previous Edition
16) The tendency of many different economic variables to have regular and predictable patterns
over the business cycle is called
A) persistence.
B) comovement.
C) periodicity.
D) recurrence.
Answer: B
Diff: 1
Topic: Section: 8.1
Question Status: Previous Edition
4
Copyright © 2017 Pearson Education, Inc.
17) Comovement is
A) the tendency for declines in economic activity to be followed by further declines, and for
growth in economic activity to be followed by more growth.
B) the idea that the standard pattern of contraction—trough—expansion—peak occurs again and
again in industrial economies.
C) the tendency of many economic variables to move together in a predictable way over the
business cycle.
D) the idea that peaks and troughs of the business cycle occur at regular intervals.
Answer: C
Diff: 1
Topic: Section: 8.1
Question Status: Previous Edition
18) The tendency of many economic variables to move together in a predictable way over the
business cycle is called
A) recurrence.
B) persistence.
C) comovement.
D) inflation.
Answer: C
Diff: 1
Topic: Section: 8.1
Question Status: Previous Edition
19) The fact that business cycles are recurrent but not periodic means that
A) business cycles occur at predictable intervals, but do not last a predetermined length of time.
B) the business cycle's standard contraction—trough—expansion—peak pattern has been
observed to occur over and over again, but not at predictable intervals.
C) business cycles occur at predictable intervals, but do not all follow a standard contraction—
trough—expansion—peak pattern.
D) business cycles last a predetermined length of time, but do not all follow a standard
contraction—trough—expansion—peak pattern.
Answer: B
Diff: 2
Topic: Section: 8.1
Question Status: New
20) The tendency for declines in economic activity to be followed by further declines, and for
growth in economic activity to be followed by more growth is called
A) persistence.
B) comovement.
C) periodicity.
D) recurrence.
Answer: A
Diff: 1
Topic: Section: 8.1
Question Status: Previous Edition
5
Copyright © 2017 Pearson Education, Inc.
21) Persistence is
A) the tendency for declines in economic activity to be followed by further declines, and for
growth in economic activity to be followed by more growth.
B) the idea that the standard pattern of contraction—trough—expansion—peak occurs again and
again in industrial economies.
C) the tendency of many economic variables to move together in a predictable way over the
business cycle.
D) the idea that peaks and troughs of the business cycle occur at regular intervals.
Answer: A
Diff: 1
Topic: Section: 8.1
Question Status: Previous Edition
22) The idea that the business cycle is recurrent means that
A) declines in economic activity tend to be followed by further declines, and growth in economic
activity tends to be followed by more growth.
B) the standard pattern of contraction—trough—expansion—peak occurs again and again in
industrial economies.
C) many economic variables to move together in a predictable way over the business cycle.
D) peaks and troughs of the business cycle occur at regular intervals.
Answer: B
Diff: 1
Topic: Section: 8.1
Question Status: Previous Edition
23) Define the following characteristics of business cycles: recurrence and persistence.
Answer: Business cycles exhibit recurrence and persistence:
(1) Recurrence means that each complete cycle is followed by another complete cycle.
(2) Persistence means that, once begun, each contraction tends to continue. Likewise, once
begun, each expansion tends to continue. For example, the 1981-1982 contraction lasted for 16
months, and the 1982-1990 expansion lasted for 93 months. These are persistent events.
Diff: 1
Topic: Section: 8.1
Question Status: Previous Edition
6
Copyright © 2017 Pearson Education, Inc.
24) Describe the major features of the business cycle. Be sure to discuss what variables are
affected by the cycle, a description of the key features that are apparent in the data, how
variables are related to one another, how regular the cycle is, and how predictable the cycle is.
Answer: The business cycle is defined as a fluctuation of aggregate economic activity. There are
recurrent but not periodic movements of aggregate activity, with many variables moving in the
same direction at the same time (comovement). Increases in aggregate economic activity are
expansions, while reductions in aggregate economic activity are contractions, or recessions. Both
expansions and contractions exhibit persistence, so once an expansion or contraction begins, it
tends to last some time.
Diff: 1
Topic: Section: 8.1
Question Status: Previous Edition
8
Copyright © 2017 Pearson Education, Inc.
7) By 1937, when a new recession began in the midst of the Great Depression,
A) GDP had almost recovered to its 1929 level, but unemployment was still above the 1929
level.
B) unemployment had almost fallen back to its 1929 level, but GDP had yet to recover to its
1929 level.
C) neither GDP nor unemployment had returned to near their 1929 levels.
D) both GDP and unemployment had returned to near their 1929 levels.
Answer: A
Diff: 1
Topic: Section: 8.2
Question Status: Previous Edition
10) The longest economic expansion in the United States occurred during the
A) 1940s.
B) 1960s.
C) 1980s.
D) 1990s.
Answer: D
Diff: 1
Topic: Section: 8.2
Question Status: Previous Edition
9
Copyright © 2017 Pearson Education, Inc.
11) The Great Recession began in ________ and ended in ________.
A) December 2007; June 2009
B) December 2007; December 2011
C) October 2008; June 2009
D) October 2008; December 2011
Answer: A
Diff: 1
Topic: Section: 8.2
Question Status: Previous Edition
12) Christina Romer's criticism of the belief that business cycles had moderated since World
War II depended on the fact that
A) estimates of the timing of business cycles since World War II had been inaccurate.
B) misuse of historical data had caused economists to understate the size of cyclical fluctuations
in the post-World War II era.
C) economists had ignored the roles of the government and international trade in mitigating
economic fluctuations prior to World War II.
D) economists had left out important components of GDP, such as wholesale and retail
distribution, transportation, and services, in their pre-World War II estimates.
Answer: D
Diff: 1
Topic: Section: 8.2
Question Status: Previous Edition
10
Copyright © 2017 Pearson Education, Inc.
14) Christina Romer's estimates of the business cycles prior to World War II showed that the
business cycle
A) had greater fluctuations before World War II than previous estimates had shown.
B) had smaller fluctuations before World War II than previously estimated.
C) had smaller fluctuations before World War II than after World War II.
D) had larger fluctuations after World War II than had been previously measured.
Answer: B
Diff: 1
Topic: Section: 8.2
Question Status: New
15) The NBER's Business Cycle Dating Committee picks recession dates by looking at many
variables, the four most important of which are industrial production, manufacturing and trade
sales, nonfarm employment, and real personal income. These variables are known as
A) leading indicators.
B) coincident indicators.
C) lagging indicators.
D) recession indicators.
Answer: B
Diff: 1
Topic: Section: 8.2
Question Status: Previous Edition
17) According to research by Stock and Watson, the recent decline in volatility in many
macroeconomic variables was a
A) sudden drop that occurred around 1984.
B) gradual decline throughout the 1980s.
C) sudden drop that occurred around 1990.
D) gradual decline throughout the 1990s.
Answer: A
Diff: 1
Topic: Section: 8.2
Question Status: Previous Edition
11
Copyright © 2017 Pearson Education, Inc.
18) Stock and Watson found that monetary policy was responsible for about ________% of the
reduction in output volatility that occurred in the mid-1980s.
A) 0 to 10
B) 10 to 20
C) 20 to 30
D) 30 to 40
Answer: C
Diff: 1
Topic: Section: 8.2
Question Status: Previous Edition
19) Stock and Watson found that ________ was responsible for about 20—30 % of the reduction
in output volatility that occurred in the mid-1980s.
A) reduced shocks to productivity
B) reduced shocks to food and commodity prices
C) better monetary policy
D) better inventory control
Answer: C
Diff: 1
Topic: Section: 8.2
Question Status: Previous Edition
20) The widespread decline in the volatility of many macroeconomic variables after 1984 led
economists to term this period the
A) Great Moderation.
B) Low Volatility Era.
C) Steady State.
D) Long Boom.
Answer: A
Diff: 1
Topic: Section: 8.2
Question Status: Previous Edition
21) How has the severity and duration of business cycles changed over time in the United States?
Answer: Though it is a controversial subject, it appears that business cycles have become less
severe over time. Recessions have certainly been shorter since World War II than they were
before 1929. There is some disagreement about how severe they were before 1929, with
Christina Romer arguing that measurement problems in the old data misled economists about
how severe those recessions were. But others find that the old data is just about right and
conclude that the business cycle is much less severe today.
Diff: 1
Topic: Section: 8.2
Question Status: Previous Edition
12
Copyright © 2017 Pearson Education, Inc.
22) If you were a member of the NBER business-cycle dating committee, would you declare that
the U.S. economy is now in a recession? Why? Describe the major variables that you would look
at to determine whether the economy is in a recession or not, and what features of the data you
would look for.
Answer: Many answers are possible. You should discuss GDP and other major macroeconomic
variables. You should note that you are looking for co-movement and persistence.
Diff: 1
Topic: Section: 8.2
Question Status: Previous Edition
23) Use the NBER data in Table 8.1 in the textbook on U.S. business cycle turning points to
calculate: a) the shortest business cycle from peak to peak; b) the shortest business cycle from
trough to trough; c) the longest business cycle from peak to peak; and d) the longest business
cycle from trough to trough.
Answer:
(a) The shortest business cycle from peak to peak is 17 months, which extended from August
1918 to December 1919. This includes 7 months of contraction followed by 10 months of
expansion.
(b) The shortest business cycle from trough to trough is 28 months, which extended from July
1980 to October 1982. This includes 12 months of expansion followed by 16 months of
contraction.
(c) The longest business cycle from peak to peak is 128 months, which extended from July 1990
to March 2001. This includes 8 months of contraction followed by 120 months of expansion.
(d) The longest business cycle from trough to trough is 128 months, which extended from March
1991 to November 2001. This includes 120 months of expansion followed by 8 months of
contraction.
Diff: 1
Topic: Section: 8.2
Question Status: Previous Edition
1) An economic variable that moves in the same direction as aggregate economic activity (up in
expansions, down in contractions) is called
A) procyclical.
B) countercyclical.
C) acyclical.
D) a leading variable.
Answer: A
Diff: 1
Topic: Section: 8.3
Question Status: Previous Edition
13
Copyright © 2017 Pearson Education, Inc.
2) An economic variable that moves in the opposite direction as aggregate economic activity
(down in expansions, up in contractions) is called
A) procyclical.
B) countercyclical.
C) acyclical.
D) a leading variable.
Answer: B
Diff: 1
Topic: Section: 8.3
Question Status: Previous Edition
3) An economic variable that doesn't move in a consistent pattern with aggregate economic
activity is called
A) procyclical.
B) countercyclical.
C) acyclical.
D) a leading variable.
Answer: C
Diff: 1
Topic: Section: 8.3
Question Status: Previous Edition
5) A variable that tends to move at the same time as aggregate economic activity is called
A) a leading variable.
B) a coincident variable.
C) a lagging variable.
D) an acyclical variable.
Answer: B
Diff: 1
Topic: Section: 8.3
Question Status: Previous Edition
14
Copyright © 2017 Pearson Education, Inc.
6) A variable that tends to move later than aggregate economic activity is called
A) a leading variable.
B) a coincident variable.
C) a lagging variable.
D) an acyclical variable.
Answer: C
Diff: 1
Topic: Section: 8.3
Question Status: Previous Edition
8) The CFNAI is a
A) leading index based on variables released with different frequencies.
B) coincident index based on variables released with different frequencies.
C) leading index based on 85 monthly variables.
D) coincident index based on 85 monthly variables.
Answer: D
Diff: 1
Topic: Section: 8.3
Question Status: Previous Edition
15
Copyright © 2017 Pearson Education, Inc.
10) Diebold and Rudebusch showed that the composite index of leading indicators did not
improve forecasts of industrial production because
A) the index is not produced in a timely manner.
B) the government manipulates the index so it never predicts a recession.
C) the index is not designed for forecasting.
D) data on the components of the index are revised.
Answer: D
Diff: 1
Topic: Section: 8.3
Question Status: Previous Edition
11) Which of the following macroeconomic variables is procyclical and coincident with the
business cycle?
A) Residential investment
B) Nominal interest rates
C) Industrial production
D) Unemployment
Answer: C
Diff: 2
Topic: Section: 8.3
Question Status: Previous Edition
12) Which of the following macroeconomic variables is procyclical and leads the business cycle?
A) Business fixed investment
B) Residential investment
C) Nominal interest rates
D) Unemployment
Answer: B
Diff: 2
Topic: Section: 8.3
Question Status: Previous Edition
16
Copyright © 2017 Pearson Education, Inc.
14) Real interest rates are
A) procyclical, just like nominal interest rates.
B) acyclical, while nominal interest rates are procyclical.
C) acyclical, just like nominal interest rates.
D) countercyclical, while nominal interest rates are procyclical.
Answer: B
Diff: 1
Topic: Section: 8.3
Question Status: Previous Edition
15) Which of the following macroeconomic variables is procyclical and lags the business cycle?
A) Business fixed investment
B) Employment
C) Stock prices
D) Nominal interest rates
Answer: D
Diff: 2
Topic: Section: 8.3
Question Status: Previous Edition
16) Which of the following macroeconomic variables would you include in an index of leading
economic indicators?
A) Employment
B) Inflation
C) Real interest rates
D) Residential investment
Answer: D
Diff: 2
Topic: Section: 8.3
Question Status: Previous Edition
17
Copyright © 2017 Pearson Education, Inc.
18) Which of the following macroeconomic variables would you exclude from an index of
leading economic indicators?
A) Money supply
B) Industrial production
C) Inventory investment
D) Residential investment
Answer: B
Diff: 2
Topic: Section: 8.3
Question Status: Previous Edition
19) Which of the following macroeconomic variables could not be used as a leading economic
indicator?
A) Residential investment
B) Employment
C) The money supply
D) Stock prices
Answer: B
Diff: 2
Topic: Section: 8.3
Question Status: Previous Edition
20) 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
Diff: 1
Topic: Section: 8.3
Question Status: Previous Edition
21) You want to invest in a firm whose profits show large fluctuations throughout the business
cycle. Which of the following would you invest in?
A) A corporation that depends heavily on business fixed investment
B) A corporation that depends heavily on consumer services
C) A corporation that depends heavily on consumer nondurables
D) A corporation that depends heavily on government purchases
Answer: A
Diff: 1
Topic: Section: 8.3
Question Status: Previous Edition
18
Copyright © 2017 Pearson Education, Inc.
22) You want to invest in a firm whose profits show small fluctuations throughout the business
cycle. Which of the following would you invest in?
A) A corporation that depends heavily on business fixed investment
B) A corporation that depends heavily on residential investment
C) A corporation that depends heavily on consumer nondurables
D) A corporation that depends heavily on consumer durables
Answer: C
Diff: 2
Topic: Section: 8.3
Question Status: New
19
Copyright © 2017 Pearson Education, Inc.
26) The job finding rate
A) equals 1 minus the job loss rate.
B) remains constant over the business cycle.
C) rises in recessions.
D) rises in expansions.
Answer: D
Diff: 1
Topic: Section: 8.3
Question Status: Previous Edition
27) The probability that an employed worker will lose his or her job in the next month is known
as
A) the unemployment rate.
B) the job finding rate.
C) the underemployment rate.
D) the job loss rate.
Answer: D
Diff: 1
Topic: Section: 8.3
Question Status: Previous Edition
20
Copyright © 2017 Pearson Education, Inc.
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Title: Napoléon
Language: French
NAPOLÉON
J’ordonne, ou je me tais.
PARIS
LES ÉDITIONS G. CRÈS ET Cie
21, RUE HAUTEFEUILLE, 21
MCMXXI
DU MÊME AUTEUR
PROCHAINEMENT
L’Arbre d’Éden 1 v.
POUR PARAITRE
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A
CELUI — QUEL QU’IL SOIT — DES CHEFS
DE LA RÉVOLUTION UNIVERSELLE — QUELLE QU’ELLE SOIT —
QUI AURA LA VERTU DIVINE
DE LUI IMPOSER L’ORDRE
QU’ELLE ÉTABLIRA DANS SON CŒUR.
NAPOLÉON
I
JÉSUS ET LUI