5. (Economic Fluctuations) Why doesn’t the National Bureau of Economic Research

Question

5. (Economic Fluctuations) Why doesn’t the National Bureau of Economic Research identify the turning points in economic activity until months after they occur?


15. (Aggregate Demand and Supply) Determine whether each of the following would cause a shift of the aggregate demand curve, a shift of the aggregate supply curve, neither, or both. Which curve shifts, and in which direction? What happens to aggregate output and the price level in each case?
a. The price level changes
b. Consumer confidence declines
c. The supply of resources increases
d. The wage rate increases

12. (Convergence) Explain the convergence theory. Under what circumstances is convergence unlikely to occur?

15. (Growth and the PPF) Use the production possibilities frontier (PPF) to demonstrate economic growth.
a. With consumption goods on one axis and capital goods on the other, show how the combination of goods selected this period affects the PPF in the next period.
b. Extend this comparison by choosing a different point on this period’s PPF and determining whether that combination leads to more or less growth over
the next period.

Explanation / Answer

5. (Economic Fluctuations) Why doesn’t the National Bureau of Economic Research identify the turning points in economic activity until months after they occur? Because it takes time to both MAKE records and analyze records to identify economic turning points. The Bureau never knows the exact condition of an economy because the moment that the condition is "recorded," another person has already found himself a job - and another, perhaps, has lost his. Fluctuations take a great deal of analysis, and a great deal of analysis takes time.

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