practice quiz 17 macro

Which of the following will probably rise when the economy is in a recession?

Initial unemployment claims

Which of the following correctly describes the business cycle?

It is the fluctuations of GDP around the potential output.

An example of a leading indicator is:

stock market

An economy's potential output level is:

the output that is possible when all resources are fully employed.

Suppose that an economy is in a recession. You would expect to see the unemployment rate:

rise above the equilibrium unemployment rate.

Based on Okun's rule of thumb, if you forecast that the output gap will decline from 0% to -3%, the unemployment rate will:

rise by 1.5%.

What kind of data adjustment removes the effect of sales spikes due to the holiday season?

seasonally adjusted data

The Great Moderation refers to the:

decreased volatility of the U.S. economy.

Which of the following is a narrow indicator?

the stock price of a company

Which economic indicator tells you how fast wages and benefits are rising?

The employment cost index

The four stages of the business cycle are:

expansion, peak, recession, trough

If an economy has a positive output gap of 1.5%, this means:

GDP is 1.5% above potential GDP

Which of the following will fall when the economy is expanding?

Applications for unemployment benefits