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The duration of an economic fluctuation ____________. A. is predictable but only

ID: 1202803 • Letter: T

Question

The duration of an economic fluctuation ____________.

A.

is predictable but only in developed economies with good data.

B.

is completely unpredictable.

C.

has limited predictability.

D.

is completely predictable.

Using sophisticated statistical techniques, economists can usually predict ____________.

A.

the co-movement of macroeconomic variables.

B.

the beginning of a recession.

C.

the end of a recession.

D.

the end of an expansion.

The ________ in employment during a recession is smaller if wages are ________.

A.

increase; rigid

B.

decline; flexible

C.

increase; flexible

D.

decline; rigid

Which of the following is true?

A.

Investment growth tends to be high when GDP growth is low.

B.

Unemployment growth tends to be high when GDP growth is high.

C.

Investment growth tends to be high when consumption growth is high.

D.

Consumption growth tends to be high when GDP growth is low.

According to ________, there is a close connection between unemployment and the growth rate of real GDP.

A.

Okun's Law

B.

Ricardo's Law

C.

Engel's Law

D.

Say's Law

When workers are laid off, what happens to physical capital?

A.Laborers become more productive, leading firms to increase capacity utilization.

B.Capacity utilization does not change.

C.Physical capital becomes less productive, leading firms to reduce capacity utilization.

D.Physical capital becomes more productive, leading firms to increase capacity utilization.

The government of Poorland increased its expenditure following a recession. This is likely to lead to ________.

A.higher interest rates

B. lower real wages

C.a decrease in the price level

D.an increases in demand for labor

Okun's Law states that ____________.

A.

when growth of GDP is positive, it tends to be positive in subsequent quarters.

B.

during recessions, firms tend to not lay off workers if they believe the slowdown will be temporary.

C.

when growth in real GDP is above 3%, unemployment drops and when it is below 3%, unemployment increases.

D.

when growth in real GDP is below 3%, unemployment drops and when it is above 3%, unemployment increase

________ emphasized that animal spirits affect GDP.

A.

David Ricardo

B.

John Maynard Keynes

C.

Milton Friedman

D.

Adam Smith

According to the concept of persistence in the rate of growth, if the economy contracts this quarter, it will ____________.

A.

likely contract next quarter.

B.definitely contract next quarter.

C.likely grow next quarter.

D.definitely grow next quarter

Assuming all else equal, when the labor demand curve shifts to the left, ________.

A.unemployment falls

B.equilibrium wage rises

C.output falls

D.inflation rises

Explanation / Answer

1. The duration of an economic fluctuation C.
has limited predictability.
2.Using sophisticated statistical techniques, economists can usually predict A.
the co-movement of macroeconomic variables.
3.The ________ in employment during a recession is smaller if wages are ________.
C.
increase; flexible
4.According to ________, there is a close connection between unemployment and the growth rate of real GDP.
A.
Okun's Law

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