Economic activity that is above potential output signals that potential output is about to increase occurs near the trough, rather than the peak, of a business cycle is not possible results from an economic shock to which the economy has yet to adjust fully none of the above

Question 43 In a business cycle, a period from trough to peak may be referred to as a recurrence a contraction an expansion all of the above none of the above

The long-run growth rate of aggregate output (Y) is zero since the economy is at a steady state. Group of answer choices True False

High rates of​ inflation, which lowers the unemployment rate consistent with the short run​ Phillip’s Curve, also drives or determines a​ nation’s long-run level of real​ GDP?   True   False

recessions have occurred roughly once every six years since the 1960s. the unemployment rate usually decreases during a recession and increases shortly after the recession ends. real GDP usually remains roughly constant during a recession and decreases shortly after the recession ends. changes in real GDP over the business cycle are largely attributable to changes in investment over the business cycle.   Question 2 Which of the following is most commonly used to monitor short-run changes in economic activity? Answer the inflation rate real GDP aggregate demand aggregate supply   Question 3 During recessions investment Answer falls by a larger percentage than GDP. falls by about the same percentage as GDP. falls by a smaller percentage than GDP. falls but the percentage change is sometimes much larger and sometimes much smaller   Question 4 The classical model is appropriate for analysis of the economy in the Answer long run, since evidence indicates that money is not neutral in the…

All of the following impact (shift) the short-run aggregate supply curve EXCEPTtechnological innovationlabor costsresource costsunemployment

In long run macroeconomic models the effects of exogenous shocks, price rigidities and expectational errors are fundamental ingredients. True or False

Fill-in-the-Blank: The economy self-corrects for a short-run recession through __________ wages and prices.

Sort the following shocks into aggregate supply or aggregate demand shocks. Remember that "shocks” include both good and bad events. No need to motivate your answer.  Fall in the price of oil A rise in consumer optimism A hurricane that destroys factories Good weather that creates a bumper crop A rise in sales taxes Foreigners buy fewer goods Fear New inventions occur at a faster pace A faster money growth rate

The business cycle will alternate, if two or more of the components of aggregate demand decrease or increase spending. True or False