Recurring upswings and downswings in an economy's real GDP over time are called: |
business cycles. |
In the United States, business cycles have occurred against a backdrop of a long-run trend of: |
rising real GDP. |
Most economists agree that the immediate determinant of the volume of output and employment is the: |
level of total spending. |
As it relates to economic growth, the term long-run trend refers to: |
the long-term expansion or contraction of business activity that occurs over 50 or 100 years. |
In which of the following industries or sectors of the economy will business cycle fluctuations likely have the greatest effect on output? |
capital goods |
The industries of sectors of the economy in which business cycle fluctuations tend to affect output most are: |
capital goods are durable consumer goods. |
During a sever recession, we would expect output to fall the most in: |
the construction industry. |
The phase of the business cycle in which real GDP declines is called: |
a recession. |
The phase of the business cycle in which real GDP is at a minimum is called: |
the trough. |
The production of durable goods varies more than the production of nondurable goods because: |
durables purchases are postponable. |
A recession is defined as a period in which: |
real domestic output falls. |
In which phase of the business cycle will the economy most likely experience rising real output and falling unemployment rates? |
expansion |
Which of the following statements is true about causes of business cycle fluctuations? |
There are a wide range of theories as to the underlying causes of business cycle movements. |
Which of the following is not seen by economists as an underlying cause of business cycle fluctuations? |
All of these are identified as causes of business cycle changes. |
Most economists agree that the immediate cause of most business cycle variation is: |
an unexpected change in the level of total spending. |
An unexpected increase in total spending will cause an increase in GDP: |
if prices are sticky. |
What is the primary reason that changes in total spending lead to cyclical changes in output and employment? |
significant innovations occur irregularly and unexpectedly. |