Question 1

Figure 1.
 
-Referring to Figure 1, the amplitude in the early 1970s was about:

Accepted Answer

A)  2
B)  7.5
C)  9.5
D)  2 years
E)  4 yearsF) A) and B)
G) A) and C)

Question 2

Which of the following best apply to when a peak occurs in a business cycle?

Accepted Answer

A)  Inflation is falling.
B)  Unemployment is at its lowest.
C)  GDP growth is at its highest in the business cycle.
D)  Interest rates are low.E) A) and B)
F) A) and C)

Question 3

A technical definition gives a recession occurring after six successive months of negative economic growth.

Accepted Answer

A) True 
 B)False

Question 4

Comment of the nature of economic fluctuations in terms of their predictability.

Accepted Answer

Economic fluctuations are irregular and unpredictable, as you can see by looking at a graph of real GDP over time.Some recessions are close together and others are far apart.There appears to be no recurring pattern.

Question 5

What is meant by a leading indicator? Comment on the OECD data below showing an index of composite indicators for the OECD area.

Accepted Answer

A leading indicator is one which can be ...

Question 6

Procyclical is a variable that is above trend when GDP is above trend.

Accepted Answer

A) True 
 B)False

Question 7

If you and your friends are still looking for a job eighteen months after graduation, even after lowering your wage expectations, you are probably in the _________ phase of the business cycle.

Accepted Answer

A)  recession
B)  peak
C)  boom
D)  recoveryE) A) and C)
F) B) and D) A

Question 8

What is meant by co-movement, and what are the relationships between key variables and GDP?

Accepted Answer

Co-movement is the movement of pairs of ...

Question 9

Name two macroeconomic variables that decline when the economy goes into a recession.Name one macroeconomic variable that rises during a recession.

Accepted Answer

Two macroeconomic variables that decline...

Question 10

Deterministic trends are

Accepted Answer

A)  where variables change by some random amount in each time period.
B)  always constant and dependent of time for the series being analyzed.
C)  constant, positive or negative independent of time for the series being analyzed.
D)  always positive.E) A) and C)
F) All of the above

Question 11

Over the last 50 years, SA real GDP has grown at about 5 per cent per year.

Accepted Answer

A) True 
 B)False  False

Question 12

According to the new classical model, what effects will a rise in aggregate demand have on a county's GDP?

Accepted Answer

Aggregate demand is composed of consumpt...

Question 13

In the real business cycle,

Accepted Answer

A)  employment, labour productivity and real wages are procyclical.
B)  employment, labour productivity and real wages are countercyclical.
C)  employment, inflation are procyclical, but real wages are countercyclical.
D)  unemployment, labour productivity and real wages are procyclical.E) None of the above
F) B) and C)

Question 14

Marietjie maintains that she can predict when the economy is going to move up or down in a business cycle.In fact,

Accepted Answer

A)  most economists can predict the business cycle.
B)  the business cycle is quite regular, with a new phase beginning every 24 months.
C)  business cycles are irregular and unpredictable in the short run.
D)  only the World Bank can predict moves in the business cycle.E) None of the above
F) All of the above

Question 15

Which would cause SA firms to think about cutting back production?

Accepted Answer

A)  A fall in real wages.
B)  Improvement in the South African economy.
C)  Build-up of stock levels.
D)  Ease of credit controls.E) A) and B)
F) A) and C)

Question 16

Figure 1.
 
-Referring to Figure 1 there was a period of economic growth between which years?

Accepted Answer

A)  1991 to 1994
B)  1991 to just beyond 2007
C)  1992 to 1994
D)  1992 to just beyond 2007E) C) and D)
F) B) and C)

Question 17

Economists refer to fluctuations in output as the "business cycle" because movements in output are irregular and unpredictable.

Accepted Answer

A) True 
 B)False

Question 18

Use the information in table below to calculate the mean growth rate.   Time series data collected over 30 years  Highest Peak 7% Next Trough −2% Number of peaks and troughs 4 Sum of annual growth rates 75 Sum of annual positive growth rates 90\begin{array}{|l|l|}\hline 	ext { Time series data collected over } & 30 	ext { years } \\hline 	ext { Highest Peak } & 7 \% \\hline 	ext { Next Trough } & -2 \% \\hline 	ext { Number of peaks and troughs } & 4 \\hline 	ext { Sum of annual growth rates } & 75 \\hline 	ext { Sum of annual positive growth rates } & 90 \\hline\end{array} Time series data collected over  Highest Peak  Next Trough  Number of peaks and troughs  Sum of annual growth rates  Sum of annual positive growth rates ​30 years 7%−2%47590​​

Accepted Answer

A)  2.5%
B)  3%
C)  5
D)  9 E) C) and D)
F) A) and D)

Question 19

What are the main causes of changes in the business cycle?

Accepted Answer

The behaviour and decision making of fir...

Question 20

Recessions do not last forever because

Accepted Answer

A)  workers get tired of being unemployed.
B)  firms eventually have incentives to increase employment and produce more output.
C)  government steps in and boosts spending back to long-run levels.
D)  central banks have control over the money supply.E) B) and C)
F) A) and B)

Exam 13: Business Cycles

Figure 1. -Referring to Figure 1, the amplitude in the early 1970s was about:

Correct Answer
verified

Which of the following best apply to when a peak occurs in a business cycle?

Correct Answer
verified

A technical definition gives a recession occurring after six successive months of negative economic growth.

Correct Answer
verified

Comment of the nature of economic fluctuations in terms of their predictability.

Correct Answer
verified
Economic fluctuations are irregular and unpredictable, as you can see by looking at a graph of real GDP over time.Some recessions are close together and others are far apart.There appears to be no recurring pattern.

What is meant by a leading indicator? Comment on the OECD data below showing an index of composite indicators for the OECD area.

Correct Answer
verified
A leading indicator is one which can be ...
View Answer

Procyclical is a variable that is above trend when GDP is above trend.

Correct Answer
verified

If you and your friends are still looking for a job eighteen months after graduation, even after lowering your wage expectations, you are probably in the _________ phase of the business cycle.

Correct Answer
verified
A

What is meant by co-movement, and what are the relationships between key variables and GDP?

Correct Answer
verified
Co-movement is the movement of pairs of ...
View Answer

Name two macroeconomic variables that decline when the economy goes into a recession.Name one macroeconomic variable that rises during a recession.

Correct Answer
verified
Two macroeconomic variables that decline...
View Answer

Deterministic trends are

Correct Answer
verified

Over the last 50 years, SA real GDP has grown at about 5 per cent per year.

Correct Answer
verified
False

According to the new classical model, what effects will a rise in aggregate demand have on a county's GDP?

Correct Answer
verified
Aggregate demand is composed of consumpt...
View Answer

In the real business cycle,

Correct Answer
verified

Marietjie maintains that she can predict when the economy is going to move up or down in a business cycle.In fact,

Correct Answer
verified

Which would cause SA firms to think about cutting back production?

Correct Answer
verified

Figure 1. -Referring to Figure 1 there was a period of economic growth between which years?

Correct Answer
verified

Economists refer to fluctuations in output as the "business cycle" because movements in output are irregular and unpredictable.

Correct Answer
verified

Correct Answer
verified

What are the main causes of changes in the business cycle?

Correct Answer
verified
The behaviour and decision making of fir...
View Answer

Recessions do not last forever because

Correct Answer
verified

Exam 13: Business Cycles

Figure 1. -Referring to Figure 1, the amplitude in the early 1970s was about:

Correct AnswerverifiedShow Answer

Which of the following best apply to when a peak occurs in a business cycle?

Correct AnswerverifiedShow Answer

A technical definition gives a recession occurring after six successive months of negative economic growth.

Correct AnswerverifiedShow Answer

Comment of the nature of economic fluctuations in terms of their predictability.

Correct AnswerverifiedEconomic fluctuations are irregular and unpredictable, as you can see by looking at a graph of real GDP over time.Some recessions are close together and others are far apart.There appears to be no recurring pattern.

What is meant by a leading indicator? Comment on the OECD data below showing an index of composite indicators for the OECD area.

Correct AnswerverifiedA leading indicator is one which can be ...View AnswerShow Answer

Procyclical is a variable that is above trend when GDP is above trend.

Correct AnswerverifiedShow Answer

If you and your friends are still looking for a job eighteen months after graduation, even after lowering your wage expectations, you are probably in the _________ phase of the business cycle.

Correct AnswerverifiedA

What is meant by co-movement, and what are the relationships between key variables and GDP?

Correct AnswerverifiedCo-movement is the movement of pairs of ...View AnswerShow Answer

Name two macroeconomic variables that decline when the economy goes into a recession.Name one macroeconomic variable that rises during a recession.

Correct AnswerverifiedTwo macroeconomic variables that decline...View AnswerShow Answer

Deterministic trends are

Correct AnswerverifiedShow Answer

Over the last 50 years, SA real GDP has grown at about 5 per cent per year.

Correct AnswerverifiedFalse

According to the new classical model, what effects will a rise in aggregate demand have on a county's GDP?

Correct AnswerverifiedAggregate demand is composed of consumpt...View AnswerShow Answer

In the real business cycle,

Correct AnswerverifiedShow Answer

Marietjie maintains that she can predict when the economy is going to move up or down in a business cycle.In fact,

Correct AnswerverifiedShow Answer

Which would cause SA firms to think about cutting back production?

Correct AnswerverifiedShow Answer

Figure 1. -Referring to Figure 1 there was a period of economic growth between which years?

Correct AnswerverifiedShow Answer

Economists refer to fluctuations in output as the "business cycle" because movements in output are irregular and unpredictable.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

What are the main causes of changes in the business cycle?

Correct AnswerverifiedThe behaviour and decision making of fir...View AnswerShow Answer

Recessions do not last forever because

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Economic fluctuations are irregular and unpredictable, as you can see by looking at a graph of real GDP over time.Some recessions are close together and others are far apart.There appears to be no recurring pattern.

Correct Answer
verified
A leading indicator is one which can be ...
View Answer

Correct Answer
verified

Correct Answer
verified
A

Correct Answer
verified
Co-movement is the movement of pairs of ...
View Answer

Correct Answer
verified
Two macroeconomic variables that decline...
View Answer

Correct Answer
verified

Correct Answer
verified
False

Correct Answer
verified
Aggregate demand is composed of consumpt...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The behaviour and decision making of fir...
View Answer

Correct Answer
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