Question 1

One of the reasons for less volatility in the economy is
A)better monetary policy.
B)increasing financial market activities.
C)higher productivity.
D)advances in technology.

Accepted Answer

Better monetary policy can lead to fewer economic shocks and more stability in financial markets, which would result in less volatility in the economy. It allows central banks to respond proactively to economic events rather than reactively, which can prevent economic instability.

Question 2

Which of the following activities is less sensitive to the business cycles?
A)car manufacturing
B)computer industry
C)insurance services
D)building material

Accepted Answer

Insurance services are typically less sensitive to business cycles, as people will still need insurance regardless of the state of the economy. Car manufacturing, building materials, and the computer industry are all more sensitive to business cycles, as consumers and businesses may cut back on spending during recessions.

Question 3

Which of the following is true about the business cycles in Canada?
A)The largest contractions were experienced in 1920 and 1929.
B)The economy grew strongly after World War II.
C)The 1991 recession was longer but shallower than the 1981 recession.
D)All of the above.

Accepted Answer

- A is true as the largest contractions in Canada's history were experienced in 1920-1921 and 1929-1933.
- B is true as the post-World War II period saw a period of sustained economic growth and prosperity, known as the "Golden Age" of capitalism.
- C is true as the recession of 1991 was longer but shallower than the recession of 1981-1982.

Question 4

Explain the index of leading indicators,its applications,and its potential problems.

Accepted Answer

The answer of Explain the index of leading indicators,its applications,and...

Question 5

Describe the major features of the business cycle.Be sure to discuss what variables are affected by the cycle,a description of the key features that are apparent in the data,how variables are related to one another,how regular the cycle is,and how predictable the cycle is.

Accepted Answer

The answer of Describe the major features of the business...

Question 6

List five macroeconomic variables which are procyclical and indicate whether they are leading,lagging,or coincident variables.

Accepted Answer

The answer of List five macroeconomic variables which are procyclical...

Question 7

When a recession occurs,do economists expect it to be a temporary phenomenon? Or is there some degree of permanence? What is the empirical evidence?

Accepted Answer

The answer of When a recession occurs,do economists expect it...

Question 8

Which of the following is NOT true about the business cycles?
A)Nominal interest rates are procyclical and lagging.
B)Real interest rates are countercyclical and leading.
C)Stock prices are procyclical and leading.
D)Inflation is procyclical and lagging.

Accepted Answer

Real interest rates are actually procyclical, not countercyclical. Other statements are true about the business cycles.

Question 9

For each outcome below,tell what type of shift must have taken place in either the aggregate demand curve or the long-run aggregate supply curve.
a.In the short run,the price level is unchanged and output rises.
b.In the long run,the price level declines and output is unchanged.
c.In the long run,the price level rises and output declines.

Accepted Answer

The answer of For each outcome below,tell what type of...

Question 10

How has the severity and duration of business cycles changed over time in Canada?

Accepted Answer

The answer of How has the severity and duration of...

Question 11

The two deepest recessions in Canada's history occurred in
A)2000 and 2008.
B)1981 and 1991.
C)1961 and 1981.
D)1920 and 1929.

Accepted Answer

The answer of The two deepest recessions in Canada's history...

Question 12

Explain how nominal money growth varies across the business cycles and why it is volatile.

Accepted Answer

The answer of Explain how nominal money growth varies across...

Question 13

Describe briefly what are the major differences between the classical economists and the Keynesian economists with regard to causes of business cycles,long-run adjustments to shock,and the government policies in restoring the full employment.

Accepted Answer

The answer of Describe briefly what are the major differences...

Question 14

Which of the following statements is true?
A)Financial variables are procyclical,but real variables are countercyclical.
B)The nominal interest rate is procyclical and lagging,but the real interest rate is acyclical.
C)Average labour productivity is acyclical,but the real wage is procyclical.
D)Both exports and imports are procyclical.

Accepted Answer

The nominal interest rate is procyclical and lagging, but the real interest rate is acyclical.

Question 15

What are some of the problems with using the leading indicators to forecast recessions? If you were a policymaker,would you rely on them?

Accepted Answer

The answer of What are some of the problems with...

Question 16

Which of the following is true about the business cycles?
A)Production and expenditures are procyclical.
B)Employment is procyclical,but unemployment is countercyclical.
C)Inflation and money growth are procyclical.
D)All of the above.

Accepted Answer

All of the given options are true. Production and expenditures tend to increase during economic expansions and decrease during recessions, making them procyclical. Similarly, employment tends to rise during expansions and fall during recessions, making it procyclical. However, unemployment tends to increase during recessions and decrease during expansions, making it countercyclical. Inflation and money growth also tend to increase during economic expansions and decrease during recessions, making them procyclical.

Question 17

Explain why durable goods are more sensitive than semi- and non-durable goods to the business cycles.

Accepted Answer

The answer of Explain why durable goods are more sensitive...

Question 18

Which of the following sectors respond strongly to the business cycles?
A)food products
B)clothing products
C)education services
D)computer products

Accepted Answer

The answer of Which of the following sectors respond strongly...

Quiz 8: Business Cycles

One of the reasons for less volatility in the economy is

Which of the following activities is less sensitive to the business cycles?

Which of the following is true about the business cycles in Canada?

Explain the index of leading indicators,its applications,and its potential problems.

Describe the major features of the business cycle.Be sure to discuss what variables are affected by the cycle,a description of the key features that are apparent in the data,how variables are related to one another,how regular the cycle is,and how predictable the cycle is.

List five macroeconomic variables which are procyclical and indicate whether they are leading,lagging,or coincident variables.

When a recession occurs,do economists expect it to be a temporary phenomenon? Or is there some degree of permanence? What is the empirical evidence?

Which of the following is NOT true about the business cycles?

How has the severity and duration of business cycles changed over time in Canada?

The two deepest recessions in Canada's history occurred in

Explain how nominal money growth varies across the business cycles and why it is volatile.

Describe briefly what are the major differences between the classical economists and the Keynesian economists with regard to causes of business cycles,long-run adjustments to shock,and the government policies in restoring the full employment.

Which of the following statements is true?

What are some of the problems with using the leading indicators to forecast recessions? If you were a policymaker,would you rely on them?

Which of the following is true about the business cycles?

Explain why durable goods are more sensitive than semi- and non-durable goods to the business cycles.

Which of the following sectors respond strongly to the business cycles?