Why does it take so long for the declaration of the beginning and end of recessions in the U.S. and why is there a lack of clarity as to what is and is not a recession?
What will be an ideal response?
There is no official definition of a recession. The unofficial arbiter of the timing of recessions is the NBER's business cycle dating committee. The committee includes many measures in determining whether or not the economy has entered or is leaving a recessionary period. Output is not the only measure looked at, so while many people may still focus on dips in actual output to identify a recession, the NBER's committee is looking at the overall level of economic activity. And as we saw in an earlier chapter, there are delays in measuring the level of economic activity and the measurements are often subjected to numerous revisions.
You might also like to view...
The rash of hurricanes that pelted the Gulf Coast in 2005 resulted in a large decline in gasoline production as many offshore rigs were shut down and many refineries were taken off line while waiting out the hurricane
The decrease in supplies of gasoline led to a run up in prices. Many voters clamored for relief by calling on their congressman and senators to enact temporary price controls. Analyze the impact on the gasoline market that would have transpired had politicians actually headed the calls by voters to impose price controls on gasoline.
The short-run Phillips Curve is ________, and the long-run Phillips Curve is ________.
A. upward sloping; vertical B. downward sloping; horizontal C. downward sloping; vertical D. upward sloping; horizontal
When will an individual's budget line coincide with an iso-expected value line?
a. Always. b. Never. c. When the individual is risk-neutral. d. When the individual is offered fair odds.
Who once said that taxes are the price we pay for a civilized society?
a. Milton Friedman b. Theodore Roosevelt c. Arthur Laffer d. Oliver Wendell Holmes, Jr.