Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 21, Problem 6MCQ
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Consider the following statements about the business cycle.
Which of the following statements is
incorrect
?
A.
A rise in economic activity from the cycle trough to the peak indicates that the economy is in an expansion.
B.
A fall in economic activity from the cycle peak to the trough indicate that the economy is in a recession.
C.
The business cycle is a regular fluctuation of real GDP around potential GDP that is predictable.
D.
The business cycle is a periodic cycle in real GDP and employment.
30. What is the difference between a recession and a depression?
A. A depression is the opposite of a recession.
B. A depression occurs at the peak of the business cycle, while a recession occurs during a contraction.
C. A depression is a particularly severe and long-lasting form of recession.
D. A depression is caused by government inaction, while a recession is a natural feature of the business cycle.
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Chapter 21 Solutions
Foundations of Economics (8th Edition)
Ch. 21.A - Prob. 1SPPCh. 21.A - Prob. 2SPPCh. 21.A - Prob. 3SPPCh. 21.A - Prob. 4SPPCh. 21.A - Prob. 5SPPCh. 21.A - Prob. 6SPPCh. 21.A - Prob. 7SPPCh. 21.A - Prob. 1IAPCh. 21.A - Prob. 2IAPCh. 21.A - Prob. 3IAP
Ch. 21.A - Prob. 4IAPCh. 21.A - Prob. 5IAPCh. 21.A - Prob. 6IAPCh. 21.A - Prob. 7IAPCh. 21 - Prob. 1SPPACh. 21 - Prob. 2SPPACh. 21 - Prob. 3SPPACh. 21 - Prob. 4SPPACh. 21 - Prob. 5SPPACh. 21 - Prob. 6SPPACh. 21 - Prob. 7SPPACh. 21 - Prob. 8SPPACh. 21 - Prob. 9SPPACh. 21 - Prob. 10SPPACh. 21 - Prob. 1IAPACh. 21 - Prob. 2IAPACh. 21 - Prob. 3IAPACh. 21 - Prob. 4IAPACh. 21 - Prob. 5IAPACh. 21 - Prob. 6IAPACh. 21 - Prob. 7IAPACh. 21 - Prob. 8IAPACh. 21 - Prob. 9IAPACh. 21 - Prob. 10IAPACh. 21 - Prob. 11IAPACh. 21 - Prob. 12IAPACh. 21 - Prob. 1MCQCh. 21 - Prob. 2MCQCh. 21 - Prob. 3MCQCh. 21 - Prob. 4MCQCh. 21 - Prob. 5MCQCh. 21 - Prob. 6MCQCh. 21 - Prob. 7MCQ
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- Typically, when will the National Bureau of Economic Research (NBER) announce that the economy is in a recession? A. on the date that the recession begins B. typically, more than 10 years after the recession begins C. about six months before the recession begins D. a year or more after the recession has begunarrow_forwardThe lowest part of a recession is referred to as its _________. a. Depression b. Boom c. Trough d. Peakarrow_forward1. Real GDP can be decomposed into Trend and Cycle, where the Trend captures the ______________ of the economy.arrow_forward
- H6. Fill in the blank: An economy is in a recession if ____________ falls over two quarters (six months). Select one: a. nominal GDP b. real GDP c. gross national happiness d. the unemployment ratearrow_forwardFill in the Blanks A. The business cycle is defined as the periodic cycle up and down movement of actual economic production. It is characterized by alternating periods of economic expansion and economic recession. It is often characterize by the tendency of _____________(Real GDP/Potential GDP)to fluctuate about______________(Real GDP/Potential GDP) B. A(n) ____________________(recessionary/expansionary) period of the business cycle is characterized by declining total economic production and rising unemploymentarrow_forwardExhibit 23-1 real GDP A B B real GDP f CDEFGHI Time Potential GDP According to Exhibit 23-1, which of the following is true? a. Potential GDP fell between year B and year D. Ob. In normal times, real GDP is above potential GDP. c. Unemployment rose between year D and year F. d. All recessions are of the same duration. e. Aggregate demand fell between year B and year D.arrow_forward
- 1. The idea that the business cycle is recurrent means that the standard pattern of contraction-trough-expansion-peak occurs again and again in industrial economies. Which of the following is NOT likely if an economy is in a recession or headed for one? A) A decrease in consumer confidence. C) Firms/producers are eager to increase their investment. B) An increase in unemployment. D) All of the above. 2. The idea that the business cycle is recurrent means that the standard pattern of contraction-trough-expansion-peak occurs again and again in industrial economies. Co-movement is A) the idea that the standard pattern of contraction-trough-expansion-peak occurs again and again in industrial economies. B) the tendency of many economic variables to move together in a predictable way over the business cycle. C) the idea that peaks and troughs of the business cycle occur at regular intervals. D) the tendency for declines in economic activity to be followed by further declines, and for growth…arrow_forwardCosider the following data on U.S GDP:a.What was the growth rate of nominal GDP between 1994 to 2014?b.What was the growth rate of the GDPdeflator between 1994 to 2014?c.What was the real GDP in 1994 measured in 2009 prices?d.What was the real GDP in 2014measured in 2009 prices?e.What was the growth rate of the GDP between 1994 to 2014?f.Was the growth rate of nominal GDP higher or lower than the growth rate of real GDP?Explain.arrow_forwardAccording to Table 19.7, how long has the average recession lasted since the end of World War II?arrow_forward
- What is stagflation?arrow_forwardWhat makes the 2007-2009 recession special? 1. because of the length of the recession 2. because of period required for the economy to recover from the recession and whyarrow_forward13. As a general rule, a recession is a decline in real GDP lasting at least: 3 quarters 1 month 6 months none of the answers given is correct 1 yeararrow_forward
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