Exam (elaborations) TEST BANK FOR Macroeconomics 9th Edition & Global Edition By Abel, Bernanke and Croushore

1) One of the first organizations to investigate the business cycle was A) the Federal Reserve System. B) the National Bureau of Economic Research. C) the Council of Economic Advisors. D) the Brookings Institution. Answer: B 2) The entire sequence of a decline in aggregate economic activity followed by recovery, measured from peak to peak or trough to trough is a A) long-run trend. B) potential output path. C) business cycle. D) recurrent comovement. Answer: C 3) A detailed history of business cycles is known as a A) historical decomposition. B) trend analysis. C) Hodrick—Prescott filter. D) business cycle chronology. Answer: D 4) The dates of turning points are determined by a committee from the A) FBI. B) BLS. C) BEA. D) NBER. Answer: D 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 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 7) The low point in the business cycle is referred to as the A) expansion. B) boom. C) trough. D) peak. Answer: C 8) When aggregate economic activity is increasing, the economy is said to be in A) an expansion. B) a contraction. C) a peak. D) a turning point. Answer: A 9) The high point in the business cycle is referred to as the A) turning point. B) peak. C) boom. D) trough. Answer: B 10) When aggregate economic activity is declining, the economy is said to be in A) a contraction. B) an expansion. C) a trough. D) a turning point. Answer: A 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 12) Turning points in business cycles occur when A) a new business cycle is initiated at the trough. B) the economy hits the peak or trough in the business cycle. C) the business cycle begins to follow a new pattern that differs from previous business cycles. D) a new business cycle is initiated at the peak. Answer: B 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 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 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 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 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 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 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 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 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 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—