Question

MCQ only

1. The National Bureau of Economic Research (NBER) tracks the economy and analyzes economic fluctuations. Turning points in the business cycle (Peaks and Troughs) are identified after they occur. In the case of a recession, it is not (SOMETIMES) designated as a recession until at least ___________ after it begins.
A. two year
B. six months
C. 90 days
D. three weeks after George Bush declares a recession.
E. none of the above
F. One year

2. Identify the accurate statement(s) below regarding economic fluctuations after 1945:
A. expansions averaged nearly one year
B. expansions averaged nearly five years
C. contractions averaged nearly one year
D. contractions averaged nearly five years
E. B and C are accurate
F. A and D are accurate

3. Which of the following statements DOES NOT apply to Keynes' view of action necessary during a depression?
A. the government should jolt the economy out of depression by increasing aggregate demand
B. the government should consider increasing its' own spending (direct stimulus)
C. the government should consider cutting taxes to stimulate consumption and investment (indirect stimulus)
D. the government should concentrate on policies which will increase aggregate supply, shifting the supply curve to the right.

4. Investment includes:
A. new plant and equipment
B. additions to inventories
C. need residential construction
D. all of the above
E. only A. and C.

Answer 1

Answer:

1]

B] six months

The National Bureau of Economic Research (NBER) tracks the economy and analyzes economic fluctuations. Turning points in the business cycle (Peaks and Troughs) are identified after they occur. In the case of a recession, it is not (SOMETIMES) designated as a recession until at least six months after it begins.

Two consecutive quarters leads to down fall and after recession begins.

2]

Correct option: E] B and C are accurate

• expansion averaged nearly five years
• contraction averaged nearly one year

During 1945 and 2009 the average contraction was approximately 11 months and the average expansion was approximately 58 months.

3]

D. the government should concentrate on policies which will increase aggregate supply, shifting the supply curve to the right.

Explanation:

Above statement DOES NOT apply to Keynes' view of action necessary during a depression

4]

Investment includes:

D. all of the above

Investment includes spending on new equipment and structures, including households' purchases of new housing.