MACROECONOMICS FOR TODAY
10th Edition
ISBN: 9781337613057
Author: Tucker
Publisher: CENGAGE L
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Question
Chapter 6, Problem 5SQ
To determine
The general rule of recession.
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During recessionsa. sales and profits fall.b. sales and profits rise.c. sales rise, profits fall.d. profits fall, sales rise.
22. Which of the following is the technical definition of a recession?
A. a fall in GDP for four consecutive quarters
B. a rise in unemployment for two consecutive quarters
C. a fall in GDP for two consecutive quarters
D. a rise in unemployment for four consecutive quarters
When an economy is at the peak of the business cycle _____________.
a.
GDP remains unchanged
b.
GDP level will be low
c.
GDP starts falling
d.
GDP level will be high
Chapter 6 Solutions
MACROECONOMICS FOR TODAY
Ch. 6.4 - Prob. 1YTECh. 6.4 - Prob. 2YTECh. 6.4 - Prob. 3YTECh. 6.5 - Prob. 1YTECh. 6 - Prob. 1SQPCh. 6 - Prob. 2SQPCh. 6 - Prob. 3SQPCh. 6 - Prob. 4SQPCh. 6 - Prob. 5SQPCh. 6 - Prob. 6SQP
Ch. 6 - Prob. 7SQPCh. 6 - Prob. 8SQPCh. 6 - Prob. 9SQPCh. 6 - Prob. 10SQPCh. 6 - Prob. 11SQPCh. 6 - Prob. 1SQCh. 6 - Prob. 2SQCh. 6 - Prob. 3SQCh. 6 - Prob. 4SQCh. 6 - Prob. 5SQCh. 6 - Prob. 6SQCh. 6 - Prob. 7SQCh. 6 - Prob. 8SQCh. 6 - Prob. 9SQCh. 6 - Prob. 10SQCh. 6 - Prob. 11SQCh. 6 - Prob. 12SQCh. 6 - Prob. 13SQCh. 6 - Prob. 14SQCh. 6 - Prob. 15SQCh. 6 - Prob. 16SQCh. 6 - Prob. 17SQCh. 6 - Prob. 18SQCh. 6 - Prob. 19SQCh. 6 - Prob. 20SQ
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- Real GDPa. is the current dollar value of all goods produced by the citizens of an economy within a given time.b. measures economic activity and income.c. is used primarily to measure long-run changes rather than short-run fluctuations.d. All of the above are correct.arrow_forward9) If real GDP has decreased, which of the following statements is always true? a. Nominal GDP is lower than in the previous year b. Nominal GDP is higher than in the previous year The deflator is lower than in the previous year Nominal GDP might have decreased if inflation was positive The amount of good and services produced is lower than in the previous year C. d. e. f. Rising prices led to falling outputarrow_forward1. Data on business investment can be a good indicator of whether the economy will likely be in a recession soon. This kind of data is called a ________ economic indicator. 2. Similarly, data on personal income can be a good indicator of whether the economy is currently in a recession. This kind of data is called a ________ economic indicator.arrow_forward
- a. If nominal GDP rose, does that mean that production had to increase as well? Why or why not?An increase in nominal GDP means there must have been an increase in inputs. may have been due to an increase in the price level. means production must have increased. means production must have decreased.b. What about if real GDP increased?An increase in real GDP may have been due to an increase in the price level. means production must have increased because the price level is not held constant. means production must have decreased. means production must have increased because the price level is held constant.c. Why is it important to use real GDP when comparing changes over time?Changes in real GDP over time will accurately reflect changes in real production. should not be used. We should use changes in nominal GDP when analyzing changes over time. have a time lag, which helps us accurately predict business cycles. will include changes in the price level, which gives a complete picture.arrow_forward1. GDP rises from $4 trillion in 2010 to $7 trillion in 2013. The GDP deflator in 2013 is 120. Find real GDP in 2013. Find the percentage increase in GDP between 2010 and 2013. 2. GDP rises from $5.5 trillion in 2014, the base year, to $9.5 trillion in 2018. The GDP deflator in 2018 is 140. Find real GDP in 2018. Find the percentage increase in real GDP between 2014 and 2018.arrow_forwardRecessions occura. regularly, about every 3 years.b. regularly, about every 7 years.c. regularly, about every 12 years.d. irregularlyarrow_forward
- 8. Nominal GDP is: A) the inflation adjusted GDP. B) the real GDP minus depreciation. C) the current dollar GDP. the constant dollar GDP.arrow_forwardIn an economy, people like to eat and spend for restaurant foods. This change in behavior causes ______________________ in GDP. Select one: a. Increases b. Stable c. Unchanged d. Decreasesarrow_forward1. Real GDP can be decomposed into Trend and Cycle, where the Trend captures the ______________ of the economy.arrow_forward
- 16. If all quantities produced rise by 5% and all prices fall by 5%, which of the following best describes what occurs? a. Real GDP rises by 5%, while nominal GDP falls by 5% (6. Real GDP rises by 5%, while nominal GDP is unchanged c. Real GDP is unchanged, while nominal GDP rises by 5% d. Real GDP is unchanged, while nominal GDP falls by 5%arrow_forwardConsider an economy that produces only chocolatebars. In year 1, the quantity produced is 3 barsand the price is $4 per bar. In year 2, the quantityproduced is 4 bars and the price is $5 per bar.In year 3, the quantity produced is 5 bars and theprice is $6 per bar. Year 1 is the base year.a. What is nominal GDP for each of these three years?b. What is real GDP for each of these years?c. What is the GDP deflator for each of these years?d. What is the percentage growth rate of real GDPfrom year 2 to year 3?e. What is the inflation rate as measured by the GDPdeflator from year 2 to year 3?f. In this one-good economy, how might you haveanswered parts (d) and (e) without first answeringparts (b) and (c)?arrow_forward3 Two countries A & B have completely fixed and flexible prices respectively. Consider this data GDP A Prices A GDP B Prices B year 1 5200 units 26 5200 units 26 year 2 there occurs a negative demand shock. A has a 30% decline in output. B has a 30% decline in prices. Compute Real GDP in A and B in year 1 and 2. 4 answers. Which county would experience a recession? Why?arrow_forward
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