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; and (e) investment.
What will be an ideal response?
| (a) | Industrial production is a procyclical and coincident variable. |
| (b) | Unemployment is a countercyclical variable whose timing is unclassified by the Conference |
| (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 |
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As the U.S. price level rises relative to price levels in other countries, U.S. _____
a. consumption and net exports will both decrease b. consumption and net exports will both increase c. consumption would increase and net exports will decrease d. consumption would decrease and net exports will increase e. consumption and net exports will remain constant
Globalization can be defined as:
a. the attitude or policy of placing the interests of the entire world above those of individual nations. b. viewing the entire world as a proper sphere for one nation to project political influence. c. a period in history that has witnessed a dramatic change in world political thought and the balance of power. d. an increased cross-border flow of trade in goods, services, and financial assets, along with an increased international mobility of technology, information, and individuals. e. a social movement that supports global cooperation and interaction, but which opposes the negative effects of economic development across nations.
In an imaginary economy, consumers buy only sandwiches and magazines. The fixed basket consists of 20 sandwiches and 30 magazines. In 2006, a sandwich cost $4 and a magazine cost $2 . In 2007, a sandwich cost $5 . The base year is 2006 . If the consumer price index in 2007 was 125, then how much did a magazine cost in 2007?
a. $0.83 b. $2.25 c. $2.50 d. $3.00
If a price increase from $5 to $7 causes quantity demanded to fall from 150 to 100, what is the absolute value of the own price elasticity at a price of $7 using the arc formula?
A. 1.2 B. 0.57 C. 1.24 D. 0.02