Q17. The term \"recession\" refers to a a. period of decline in real GDP over tw
ID: 1199895 • Letter: Q
Question
Q17. The term "recession" refers to a
a. period of decline in real GDP over two consecutive quarters
b. fall in the general level of real wages over two consecutive quarters
c. fall in the CPI over two consecutive quarters
d. fall in the rate of increase of real per capita GDP
Q18. Cost changes generally lag behind price changes during the business cycle.
a. true
b. false
Q19. Measuring the intensity of the business cycle requires
a. adding seasonal variations to cyclical fluctuations
b. adding seasonal variations and random fluctuations to cyclical changes
c. eliminating seasonal variations and identifiable random forces from the data
d. multiplying the trend by the cyclical fluctuations
Q20. During the contraction phase of the business cycle,
a. prices fall relative to costs, reducing profit margins
b. costs fall relative to prices, reducing profit margins
c. prices fall relative to costs, increasing profit margins
d. costs fall relative to prices, increasing profit margins
Q21. The aggregate supply curve is
a. a curve showing the quantities of total output that business will purchase for investment at various price levels
b. a curve showing the quantities of total output that will be offered for sale at various price levels
c. a curve showing the quantities of goods and services that households will provide at various price levels
d. one point on the aggregate expenditure curve
Q22. The aggregate demand curve is the sum of individual demand curves in the economy.
a. true
b. false
Q23. The classical economic doctrine held that the normal equilibrium position of the economy was one of
a. rising interest rates
b. some unemployment
c. rising prices
d. full employment
Explanation / Answer
17. a. period of decline in real GDP over two consecutive quarters...generally accepted definition, mut necessarily need not be true in every situation
18. a. True. For both increase and decrease of market driven price the Cost changes generally lag behind price changes
19.b. adding seasonal variations and random fluctuations to cyclical changes.....An ideal business must be robust and withstand all kinds of challenges which may be seasonal or random in nature
20. Contraction in a business cycle is a phase after the cycle peaks but before trough, here: a. prices fall relative to costs, reducing profit margins
21. b. a curve showing the quantities of total output that will be offered for sale at various price levels
22. The aggregate demand curve represents the total quantity of products demanded in an economy at various price levels, so a. true
23. d. full employment
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