Identify whether the major phases of the business cycle and indicate the changes in real GDP , employment and unemployment , and identify the similarity and predictability.

Question

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Answer 1

Question

Chapter 8, Problem 1CQ

To determine

Identify whether the major phases of the business cycle and indicate the changes in real GDP, employment and unemployment, and identify the similarity and predictability.

Expert Solution & Answer

Explanation of Solution

The major phases of the business cycle are business peak, contraction, recessionary trough, and expansion. In the phase of expansion, the economy will speed up the activity, hence, the real GDP will increase, employment level will increase and the unemployment rate will decrease. In peak, the economy produces at its maximum, hence, the real GDP is very high, high employment rate and low unemployment rate. During the period of contraction, the economy will slow down the economic activity, hence, the real GDP will decrease, the employment rate will decrease and the unemployment rate will increase. In a recession, the economic activity is temporarily shut down or reduces; hence, the real GDP is very low, low employment rate, and high unemployment rate.

The time period of the business cycle and the duration of the various phased are relatively not similar, it will depend upon the economic situation. Therefore, the phased of the business cycle is not predictable.

Economics Concept Introduction

Business cycle: The business cycle is said to be a series of cyclical fluctuation of economic activity expansion and contraction that prolong over a period of time. There are four stages of the business cycle, which are a boom, recession, depression, and recovery.

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M” method Given the following model, solve by the method of “M”. (see image)

As indicated in the attached image, U.S. earnings for high- and low-skill workers as measured by educational attainment began diverging in the 1980s. The remaining questions in this problem set use the model for the labor market developed in class to walk through potential explanations for this trend. 1. Assume that there are just two types of workers, low- and high-skill. As a result, there are two labor markets: supply and demand for low-skill workers and supply and demand for high-skill workers. Using two carefully drawn labor-market figures, show that an increase in the demand for high skill workers can explain an increase in the relative wage of high-skill workers. 2. Using the same assumptions as in the previous question, use two carefully drawn labor-market figures to show that an increase in the supply of low-skill workers can explain an increase in the relative wage of high-skill workers.

Answer 2

Question

Chapter 8, Problem 1CQ

To determine

Identify whether the major phases of the business cycle and indicate the changes in real GDP, employment and unemployment, and identify the similarity and predictability.

Expert Solution & Answer

Explanation of Solution

The major phases of the business cycle are business peak, contraction, recessionary trough, and expansion. In the phase of expansion, the economy will speed up the activity, hence, the real GDP will increase, employment level will increase and the unemployment rate will decrease. In peak, the economy produces at its maximum, hence, the real GDP is very high, high employment rate and low unemployment rate. During the period of contraction, the economy will slow down the economic activity, hence, the real GDP will decrease, the employment rate will decrease and the unemployment rate will increase. In a recession, the economic activity is temporarily shut down or reduces; hence, the real GDP is very low, low employment rate, and high unemployment rate.

The time period of the business cycle and the duration of the various phased are relatively not similar, it will depend upon the economic situation. Therefore, the phased of the business cycle is not predictable.

Economics Concept Introduction

Business cycle: The business cycle is said to be a series of cyclical fluctuation of economic activity expansion and contraction that prolong over a period of time. There are four stages of the business cycle, which are a boom, recession, depression, and recovery.

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Answer 3

Question

Chapter 8, Problem 1CQ

To determine

Identify whether the major phases of the business cycle and indicate the changes in real GDP, employment and unemployment, and identify the similarity and predictability.

Expert Solution & Answer

Explanation of Solution

The major phases of the business cycle are business peak, contraction, recessionary trough, and expansion. In the phase of expansion, the economy will speed up the activity, hence, the real GDP will increase, employment level will increase and the unemployment rate will decrease. In peak, the economy produces at its maximum, hence, the real GDP is very high, high employment rate and low unemployment rate. During the period of contraction, the economy will slow down the economic activity, hence, the real GDP will decrease, the employment rate will decrease and the unemployment rate will increase. In a recession, the economic activity is temporarily shut down or reduces; hence, the real GDP is very low, low employment rate, and high unemployment rate.

The time period of the business cycle and the duration of the various phased are relatively not similar, it will depend upon the economic situation. Therefore, the phased of the business cycle is not predictable.

Economics Concept Introduction

Business cycle: The business cycle is said to be a series of cyclical fluctuation of economic activity expansion and contraction that prolong over a period of time. There are four stages of the business cycle, which are a boom, recession, depression, and recovery.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 8, Problem 1CQ

To determine

Identify whether the major phases of the business cycle and indicate the changes in real GDP, employment and unemployment, and identify the similarity and predictability.

Expert Solution & Answer

Explanation of Solution

The major phases of the business cycle are business peak, contraction, recessionary trough, and expansion. In the phase of expansion, the economy will speed up the activity, hence, the real GDP will increase, employment level will increase and the unemployment rate will decrease. In peak, the economy produces at its maximum, hence, the real GDP is very high, high employment rate and low unemployment rate. During the period of contraction, the economy will slow down the economic activity, hence, the real GDP will decrease, the employment rate will decrease and the unemployment rate will increase. In a recession, the economic activity is temporarily shut down or reduces; hence, the real GDP is very low, low employment rate, and high unemployment rate.

The time period of the business cycle and the duration of the various phased are relatively not similar, it will depend upon the economic situation. Therefore, the phased of the business cycle is not predictable.

Economics Concept Introduction

Business cycle: The business cycle is said to be a series of cyclical fluctuation of economic activity expansion and contraction that prolong over a period of time. There are four stages of the business cycle, which are a boom, recession, depression, and recovery.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 8, Problem 1CQ

To determine

Identify whether the major phases of the business cycle and indicate the changes in real GDP, employment and unemployment, and identify the similarity and predictability.

Expert Solution & Answer

Explanation of Solution

The major phases of the business cycle are business peak, contraction, recessionary trough, and expansion. In the phase of expansion, the economy will speed up the activity, hence, the real GDP will increase, employment level will increase and the unemployment rate will decrease. In peak, the economy produces at its maximum, hence, the real GDP is very high, high employment rate and low unemployment rate. During the period of contraction, the economy will slow down the economic activity, hence, the real GDP will decrease, the employment rate will decrease and the unemployment rate will increase. In a recession, the economic activity is temporarily shut down or reduces; hence, the real GDP is very low, low employment rate, and high unemployment rate.

The time period of the business cycle and the duration of the various phased are relatively not similar, it will depend upon the economic situation. Therefore, the phased of the business cycle is not predictable.

Economics Concept Introduction

Business cycle: The business cycle is said to be a series of cyclical fluctuation of economic activity expansion and contraction that prolong over a period of time. There are four stages of the business cycle, which are a boom, recession, depression, and recovery.

Answer 6

Chapter 8, Problem 1CQ

To determine

Identify whether the major phases of the business cycle and indicate the changes in real GDP, employment and unemployment, and identify the similarity and predictability.

Expert Solution & Answer

Explanation of Solution

The major phases of the business cycle are business peak, contraction, recessionary trough, and expansion. In the phase of expansion, the economy will speed up the activity, hence, the real GDP will increase, employment level will increase and the unemployment rate will decrease. In peak, the economy produces at its maximum, hence, the real GDP is very high, high employment rate and low unemployment rate. During the period of contraction, the economy will slow down the economic activity, hence, the real GDP will decrease, the employment rate will decrease and the unemployment rate will increase. In a recession, the economic activity is temporarily shut down or reduces; hence, the real GDP is very low, low employment rate, and high unemployment rate.

The time period of the business cycle and the duration of the various phased are relatively not similar, it will depend upon the economic situation. Therefore, the phased of the business cycle is not predictable.

Economics Concept Introduction

Business cycle: The business cycle is said to be a series of cyclical fluctuation of economic activity expansion and contraction that prolong over a period of time. There are four stages of the business cycle, which are a boom, recession, depression, and recovery.

Answer 7

Chapter 8, Problem 1CQ

To determine

Identify whether the major phases of the business cycle and indicate the changes in real GDP, employment and unemployment, and identify the similarity and predictability.

Answer 8

Expert Solution & Answer

Explanation of Solution

The major phases of the business cycle are business peak, contraction, recessionary trough, and expansion. In the phase of expansion, the economy will speed up the activity, hence, the real GDP will increase, employment level will increase and the unemployment rate will decrease. In peak, the economy produces at its maximum, hence, the real GDP is very high, high employment rate and low unemployment rate. During the period of contraction, the economy will slow down the economic activity, hence, the real GDP will decrease, the employment rate will decrease and the unemployment rate will increase. In a recession, the economic activity is temporarily shut down or reduces; hence, the real GDP is very low, low employment rate, and high unemployment rate.

The time period of the business cycle and the duration of the various phased are relatively not similar, it will depend upon the economic situation. Therefore, the phased of the business cycle is not predictable.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Economics Concept Introduction

Business cycle: The business cycle is said to be a series of cyclical fluctuation of economic activity expansion and contraction that prolong over a period of time. There are four stages of the business cycle, which are a boom, recession, depression, and recovery.

Answer 12

Ch. 8 - Prob. 1CQ Ch. 8 - Prob. 2CQ Ch. 8 - Prob. 3CQ Ch. 8 - Prob. 4CQ Ch. 8 - Prob. 5CQ Ch. 8 - Prob. 6CQ Ch. 8 - Prob. 7CQ Ch. 8 - Prob. 8CQ Ch. 8 - Prob. 9CQ Ch. 8 - Prob. 10CQ

Identify whether the major phases of the business cycle and indicate the changes in real GDP , employment and unemployment , and identify the similarity and predictability.

Identify whether the major phases of the business cycle and indicate the changes in real GDP, employment and unemployment, and identify the similarity and predictability.

Explanation of Solution

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Chapter 8 Solutions