Reading 11: Understanding Business Cycles

Which phase of the business cycle is most likely characterized by increasing real GDP and accelerating inflation?

Inventory-sales ratios are most likely to increase above their normal level when:

Which category of consumer spending is generally most sensitive to the business cycle?

According to the Neoclassical school, business cycles are primarily driven by:

Which school of thought attributes business cycles to 'malinvestment' caused by artificially low interest rates?

Keynesian economists argue that contractions can persist because:

Which of the following is classified as a leading economic indicator?

The inventory-sales ratio is considered which type of indicator?

A person who is unemployed because they are currently transitioning between jobs is experiencing:

The unemployment rate is calculated as the number of unemployed persons divided by:

Which phenomenon describes a situation where the inflation rate is decreasing but remains positive?

Cost-push inflation is most likely initiated by:

The Laspeyres price index is known to have which type of bias?

Which price index attempts to address substitution bias by using current consumption weights?

Core inflation differs from headline inflation because it excludes:

If the Consumer Price Index (CPI) increases from 150 to 156 over a year, the inflation rate is:

In the Monetarist view, recessions are primarily caused by:

Which of the following is considered a coincident indicator?

During the contraction phase of a business cycle, inflation typically:

Real Business Cycle (RBC) theory emphasizes the effect of:

A decrease in the relative value of a country's currency is most likely to:

Discouraged workers are defined as those who:

Which unemployment type is considered always present in an economy as workers switch jobs?

Demand-pull inflation results from:

The Fisher index is calculated as the:

An increase in the labor force participation rate typically occurs when:

A rule of thumb for identifying a recession is two consecutive quarters of:

Typically, firms respond to an unplanned increase in inventory by:

The non-accelerating inflation rate of unemployment (NAIRU) is also called the:

Unit labor costs are defined as the ratio of:

At the peak of a business cycle, sales growth begins to slow, leading to:

Which economic school recommends that policymakers should not try to counteract business cycles?

An initial increase in aggregate demand when the economy is at full employment is most likely to result in:

Which of the following is most likely to be a lagging indicator?

Which technique adjusts a price index for improvements in product quality?

The combination of declining economic output and higher prices is termed:

In a cost-push inflation scenario, a decrease in aggregate supply initially leads to:

Credit cycles are typically associated with:

If a country's Consumer Price Index was 100 in the base year and 110 three years later, the real cost of living has:

Hyperinflation is best described as:

Which indicator would an analyst most likely use to identify emerging price pressure from producers?

In the United States, the 'Agency' that dates recessions is the:

Structural unemployment arises from:

Underemployed persons are defined as those who:

If a Calculate Paasche index is 114.43 and the Laspeyres index is 116, the difference is primarily due to:

Generally, total factor productivity (TFP) is:

When comparing GDP across countries, analysts should be aware that:

The 'participation ratio' is the percentage of the:

During an economic expansion, consumers are most likely to increase spending on:

Which of the following is most likely to reduce a country's long-run aggregate supply?