宏观经济学（英文版） chapter 8.docx

Macroeconomics (Hubbard et aL)Chapter 8 Business Cycles 8.1 The Short Run and the Long Run in Macroeconomics1) Keynesian economics refers to the perspective that the business cycle representsA) equilibrium.B) disequilibrium.C) long-run macroeconomic fluctuations.D) short-run macroeconomic stability.Answer: BDiff: 1 Page Ref: 273Topic: The Keynesian and Classical ApproachesObjective: LOI: Explain the difference between the short run and the long run in macroeconomics.Special Feature: noneAACSB: Reflective Thinking Skills*: Recurring2) Classical economics refers to the perspective that the business cycle can be explainedA) using equilibrium analysis.B) using disequilibrium analysis.C) by long-run macroeconomic fluctuations.D) by short-run macroeconomic instability.Answer: ADiff: 1 Page Ref: 273Topic: The Keynesian and Classical ApproachesObjective: LOI: Explain the difference between the short run and the long run in macroeconomics.Special Feature: noneAACSB: Reflective Thinking Skills*: Recurring3) From the Keynesian perspective, an increase in cyclical unemployment during a recession representsA) an equivalent increase in the natural rate of unemployment.B) a roughly equal mix of voluntary and involuntary unemployment.C) involuntary unemployment.D) a decrease in the number of discouraged workers in an economy.Answer: CDiff: 1 Page Ref: 273Topic: The Keynesian and Classical ApproachesObjective: LOI: Explain the difference between the short run and the long run in macroeconomics.Special Feature: noneAACSB: Reflective Thinking Skills*: Recurring4) On average, expansions in the United States have become, and recessions have become since 1950.A) longer; longerB) longer; shorterC) shorter; longerD) shorter; shorterAnswer: BDiff: 1 Page Ref: 279-280Topic: The Changing Severity of the U.S. Business CycleObjective: LO2: Understand what happens during a business cycle.Special Feature: none*: Recurring5) Which of the following is an explanation as to why fluctuations in real GDP have become less volatile in the United States since 1950?A) The government has become less inclined to intervene to stabilize the economy.B) Unemployment insurance and other government transfer programs have become more prevalent.C) The government and the Federal Reserve have decreased regulation and scrutiny of the financial system.D) Goods manufacturing has become a larger fraction of GDP.Answer: BDiff: 1 Page Ref: 280Topic: The Changing Severity of the U.S. Business CycleObjective: LO2: Understand what happens during a business cycle.Special Feature: noneAACSB: Reflective Thinking Skills*: Recurring6) The increased stability of the financial system in the United States since 1950 can help explainA) why the United States has only experienced one recession since 1950.B) the severity of the 2007-2009 recession.C) the increase in the gap between potential GDP and real GDP.D) the decrease in severity of business cycle fluctuations.Answer: DDiff: 1 Page Ref: 280Topic: The Changing Severity of the U.S. Business CycleObjective: LO2: Understand what happens during a business cycle.Special Feature: noneAACSB: Reflective Thinking Skills*: Recurring7) What is the name of the group which decides when recessions begin and end?A) the Business Cycle Dating CommitteeB) the Bureau of Labor StatisticsC) the Commerce DepartmentD) the Federal Reserve Open Market CommitteeAnswer: ADiff: 1 Page Ref: 281Topic: How Do We Know the Economy is in an Expansion or a Recession?Objective: LO2: Understand what happens during a business cycle.Special Feature: none*: Recurring8) The economy is in an expansion when it isA) moving from a peak to a trough.B) moving from a trough to a peak.C) at its peak.D) at its trough.Answer: BDiff: 1 Page Ref: 281Topic: How Do We Know the Economy is in an Expansion or a Recession?Objective: LO2: Understand what happens during a business cycle.Special Feature: noneAACSB: Reflective Thinking Skills*: Recurring9) According to the National Bureau of Economic Research, the ntwo most reliable comprehensive estimates of aggregate domestic production0 are when dating the beginning and ending ofrecessions.A) the level of employment and monthly payroll dataB) industrial production and wholesale and retail salesC) gross domestic product and gross domestic incomeD) real manufacturing production and the natural rate of unemploymentAnswer: CDiff: 1 Page Ref: 281Topic: How Do We Know the Economy is in an Expansion or a Recession?Objective: LO2: Understand what happens during a business cycle.Special Feature: noneAACSB: Reflective Thinking Skills*: Recurring10) As the best measure of the size of economic fluctuations associated with a business cycle, economists typically useA) real GDP.B) the deviation of real GDP from potential GDP.C) potential GDP.D) the deviation of real GDP from nominal GDP.Answer: BDiff: 2 Page Ref: 281Topic: Measuring Business CyclesObjective: LO2: Understand what happens during a business cycle.Special Feature: noneAACSB: Reflective Thinking Skills*: Recurring11) Which of the following best describes real GDP?A) Real GDP = Potential GDP - Nominal GDPB) Real GDP = Potential GDP + Deviation from potential GDPC) Real GDP = Deviation from potential GDP / Potential GDPD) Real GDP = Nominal GDP / Potential GDPAnswer: BDiff: 1 Page Ref: 281Topic: Measuring Business CyclesObjective: LO2: Understand what happens during a business cycle.Special Feature: noneAACSB: Reflective Thinking Skills*: Recurring12) If potential GDP for the third quarter of 2011 = $20.4 billion, and the deviation from potential GDP for the third quarter of 2011 = $1.6 billion, then Real GDP for the third quarter of 2011 equalsA) $6.5 billion.B) $18.8 billion.C) $22 billion.D) $32.64 billion.Answer: CDiff: 2 Page Ref: 281Topic: Measuring Business CyclesObjective: LO2: Understand what happens during a business cycle.Special Feature: noneAACSB: Analytic Skills*: Recurring13) During the first 5 months of 2011, the average price of gasoline in the United States rose from approximately $3 per gallon to almost $4 per gallon. Accompanying the increase in gas prices was a decrease in new automobile sales. Other things equal, if this trend continues, real GDP would likely and the output gap would become.A) rise; more negativeB) rise; less negativeC) fall; more negativeD) fall; less negativeAnswer: CDiff: 2 Page Ref: 281-283Topic: Measuring Business CyclesObjective: LO2: Understand what happens during a business cycle.Special Feature: An Inside Look: New Vehicle Sales Increase by 11 Percent in 2010AACSB: Reflective Thinking SkillsTable 8.1QuarterGrowth Rate of Real GDPQuarterGrowth Rate of Real GDPQuarterGrowth Rate of Real GDP2008 QI3.6%2009 Q I2.1%2010 QI-0.8%2008 Q22.52009 Q2-0.52010 Q2-2.22008 Q34.22009 Q30.02010 Q31.42008 Q44.02009 Q4-1.62010 Q43.7The table shows the growth rate of real GDP for the nation of Gigantica for the years 2008-2010.14) Refer to Table 8.1. Use the rule of thumb to determine in which quarter Gigantica first entered a recession during the years 2008-2010.A) 2008 Q4.B) 2009 Q2.C)2009 Q4D) Gigantica did not enter a recession from the years 2008-2010.Answer: CDiff: 2 Page Ref: 282Topic: Measuring Business CyclesObjective: LO2: Understand what happens during a business cycle.Special Feature: Solved Problem 82 Dating U.S. RecessionsAACSB: Reflective Thinking Skills15) The percentage deviation of real GDP from potential GDP is calledA) nominal GDP.B) the output gap.C) the multiplier.D) Okun*s law.Answer: BDiff: 2 Page Ref: 283Topic: Measuring Business CyclesObjective: LO2: Understand what happens during a business cycle.Special Feature: noneAACSB: Reflective Thinking Skills*: Recurring16) If potential GDP for the third quarter of 2011 = $20.4 billion, and the deviation from potential GDP for the third quarter of 2011 = -$1.6 billion, then the output gap wasA) -7.8%.B)-12.8%C)-18.8%.D) -32.6%.Answer: ADiff: 2 Page Ref: 283Topic: Measuring Business CyclesObjective: LO2: Understand what happens during a business cycle.Special Feature: noneAACSB: Analytic Skills*: Recurring17) If potential GDP for the fourth quarter of 2011 = $58.5 billion, and real GDP for the fourth quarter of 2011 二 $53.7 billion, then the output gap wasA) -8.9%.B) -8.2%.C) 8.2%.D) 8.9%.Answer: BDiff: 2 Page Ref: 283Topic: Measuring Business CyclesObjective: LO2: Understand what happens during a business cycle.Special Feature: noneAACSB: Analytic Skills*: Recurring18) If potential GDP for the first quarter of 2012 = $75.8 billion, and real GDP for the first quarter of 2012 = $80.3 billion, then the output gap wasA) -5.9%.B) -5.6%.C) 5.6%.D) 5.9%.Answer: DDiff: 2 Page Ref: 283Topic: Measuring Business CyclesObjective: LO2: Understand what happens during a business cycle.Special Feature: noneAACSB: Analytic Skills*: Recurring19) If potential GDP for the first quarter of 2012 = $75.8 billion, nominal GDP for the first quarter of 2012 = $80.3 billion, and the GDP deflator = 109, then the output gap wasA) 2.8%.B) 4.7%.C) 5.6%.D) 5.9%.Answer: ADiff: 3 Page Ref: 283Topic: Measuring Business CyclesObjective: LO2: Understand what happens during a business cycle.Special Feature: noneAACSB: Analytic Skills*: RecurringArticle SummaryFloods have caused an estimated $500 million in crop damage to Arkansas farmland, with over one million acres under water. The floods have caused severe damage to crops across the state, including the nation's largest rice crop. The $500 million estimate is just for the existing crop loss, and does not include damage to equipment, infrastructure, or the farmland itself. The initial estimate also does not take into account any potential future impact on the agriculture industry, which could be signiHcant. The total amount of losses may take some time to calculate, but will certainly have a significant impact on Arkansas* annual $16 billion agriculture industry.Source: Jeff Biemfohr, u$16 Billion in Flood Damage to Arkansas Farming, May 10, 2011.20) Assume that $16 billion represents the potential agricultural output for Arkansas, and prior to the flooding, the state was producing at its potential. If the initial crop loss estimate is viewed as the deviation from potential, the output gap represented by these figures would be A)-1.7%.B)-3.125%.C) -6.875%.D) -32%.Answer: BDiff: 2 Page Ref: 283Topic: Measuring Business CyclesObjective: LO2: Understand what happens during a business cycle.Special Feature: Making the Connection: n$16 Billion in Flood Damage to Arkansas Farmingn AACSB: Analytic Skills21) If the output gap is greater than zero, real GDP is potential GDP, and the economy willto reach full employment.A) greater than; expandB) greater than; contractC) less than; expandD) less than; contractAnswer: BDiff: 2 Page Ref: 283Topic: Measuring Business CyclesObjective: LO2: Understand what happens during a business cycle.Special Feature: noneAACSB: Reflective Thinking Skills*: Recurring22) When an economy begins to move from a recession to an expansion, the output gap typically A) remains positive.B) remains negative.C) switches from negative to positive.D) switches from positive to negative.Answer: BDiff: 2 Page Ref: 283Topic: Measuring Business CyclesObjective: LO2: Understand what happens during a business cycle.Special Feature: noneAACSB: Reflective Thinking Skills*: Recurring23) Typically, as an economy begins to emerge from a recession,A) unemployment falls immediately.B) inflation begins to fall.C) unemployment continues to rise.D) investment begins to fall.Answer: CDiff: 1 Page Ref: 284Topic: Costs of the Business CycleObjective: LO2: Understand what happens during a business cycle.Special Feature: noneAACSB: Reflective Thinking Skills*: Recurring24) Okun's law summarizes the relationship betweenA) unemployment and inflation.B) potential GDP and real GDP.C) potential GDP and the deviation from potential GDP.D) the output gap and the cyclical rate of unemployment.Answer: DDiff: 1 Page Ref: 284Topic: Costs of the Business CycleObjective: LO2: Understand what happens during a business cycle.Special Feature: noneAACSB: Reflective Thinking Skills*: Recurring25) Assume that for the second quarter of 2011, actual real GDP was $125.5 billion and potential real GDP was $142.7 billion. According to Okun!s law, the cyclical unemployment rate during the second quarter of 2011 wasA) 5.7%.B) 6.0%.C) 6.9%.D) 7.4%.Answer: BDiff: 2 Page Ref: 284Topic: Costs of the Business CycleObjective: LO2: Understand what happens during a business cycle.Special Feature: noneAACSB: Analytic Skills*: Recurring26) Assume that for the third quarter of 2011, actual real GDP was $176.1 billion and potential real GDP was $163.9 billion. According to Okun's law, the cyclical unemployment rate during the third quarter of 2011 wasA) -6.1%.B) -3.7%.C) 3.5%.D) 6.1%.Answer: BDiff: 2 Page Ref: 284Topic: Costs of the Business CycleObjective: LO2: Understand what happens during a business cycle.Special Feature: noneAACSB: Analytic Skills*: Recurring27) Assume that for the fourth quarter of 2011, nominal GDP was $245 billion, potential real GDP was $260 billion, and the GDP deflator was 112. According to Okun's law, the cyclical unemployment rate during the fourth quarter of 2011 wasA) 2.9%.B)3.1%.C) 8.0%.D) 8.4%.Answer: CDiff: 3 Page Ref: 284Topic: Costs of the Business CycleObjective: LO2: Understand what happens during a business cycle.Special Feature: noneAACSB: Analytic Skills*: Recurring28) Which of the following best explains the cause of the change in the unemployment rate at the end of a recession?A) Firms rapidly hire new workers at the first sign of an increase in demand for their goods.B) Firms are hesitant to rehire laid-off workers as they continue to operate below capacity.C) Discouraged workers begin to return to the labor force, causing the unemployment rate to fall.D) Frictionally unemployed workers find it easier to gain employment, lowering the natural rate of unemployment.Answer: BDiff: 2 Page Ref: 284Topic: Costs of the Business CycleObjective: LO2: Understand what happens during a business cycle.Special Feature: noneAACSB: Reflective Thinking Skills*: Recurring29) During the 2007-2009 recession and its aftermath, Okun's lawA) predicted the cyclical unemployment