Identify the comovement (i.e., direction and timing) of the following variables over a business cycle:
(a) industrial production
(b) unemployment
(c) nominal interest rates
(d) nominal money supply growth
(e) investment
(a) Industrial production is a procyclical and coincident variable.
(b) Unemployment is a countercyclical variable whose timing is unclassified by the Conference Board.
(c) Nominal interest rates are procyclical and lagging.
(d) Nominal money supply growth is a procyclical and leading variable.
(e) Investment includes inventory investment and residential investment, which are procyclical and leading variables; it also includes business fixed investment, which is a procyclical and coincident variable.
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The idea of convergence is that
a. Poor and rich economies will converge on middle-income status. b. Capitalist and Socialist systems will become more alike. c. Poor countries will grow faster than rich ones, but may level off before becoming rich. d. Agricultural technologies will come to resemble industrial technologies. e. None of the above.
Politicians and citizens may often choose policies that reduce economic efficiency because they are perceived as “fairer.”
Answer the following statement true (T) or false (F)
A fall in demand for a commodity in a perfectly competitive market will shift the long-run supply curve to the right
Indicate whether the statement is true or false
People scalping tickets for a rock concert can sell their tickets for at least a normal profit
A. when the price set by the concert hall is less than the market equilibrium price. B. when prices are too high. C. only when there is excess supply. D. any time the rock group is popular.