Principles of Macroeconomics By Ben Bernanke 5th Edition- Test Bank

Principles of Macroeconomics By Ben Bernanke 5th Edition- Test Bank

Chapter 06 Testbank

1. An informal definition of a recession is at least ______ consecutive quarters of declining real GDP.
A. two
B. four
C. six
D. eight

2. The following data give the dates of successive turning points in Australian economic activity and the corresponding levels of real GDP at the time (hypothetical data).

Turning point Date Real GDP (1996 $ billions)
(A) July 1953 1992.2
(B) May 1954 1941.0
(C) Apr 1957 2182.7
(D) Apr 1958 2117.4
(E) Apr 1960 2391.0

Which of the turning points are peaks?
A. (A), (B) and (C)
B. (C), (D) and (E)
C. (A), (C) and (E)
D. (B) and (D)

3. The following data give the dates of successive turning points in Australian economic activity and the corresponding levels of real GDP at the time (hypothetical data).

Turning point Date Real GDP (1996 $ billions)
(A) July 1953 1992.2
(B) May 1954 1941.0
(C) Apr 1957 2182.7
(D) Apr 1958 2117.4
(E) Apr 1960 2391.0

Which of the turning points are troughs?
A. (A), (B) and (C)
B. (C), (D) and (E)
C. (A), (C) and (E)
D. (B) and (D)

4. Which of the following best describes the nature of the so-called Great Moderation?
A. Lower variance in cyclical macroeconomic variables
B. Consistently higher levels of economic growth
C. Consistently lower levels of economic growth
D. Consistently low levels of inflation

5. Which of the following is most likely to increase a country’s potential output?
A. Lower interest rates
B. Increased infrastructure spending
C. Increased government transfer payments
D. Lower labour productivity

6. A recession is:
A. a period in which the economy is growing at a rate significantly below normal
B. a period in which the economy is growing at a rate significantly above normal
C. the high point of economic activity prior to a downturn
D. the low point of economic activity prior to a recovery

7. A depression is:
A. a period in which the economy is growing at a rate significantly above normal
B. the high point of economic activity prior to a downturn
C. the low point of economic activity prior to a recovery
D. a particularly severe and protracted recession

8. An expansion is:
A. a period in which the economy is growing at a rate significantly below normal
B. a period in which the economy is growing at a rate significantly above normal
C. the high point of economic activity prior to a downturn
D. the low point of economic activity prior to a recovery

9. A boom is:
A. a period in which the economy is growing at a rate significantly below normal
B. the high point of economic activity prior to a downturn
C. the low point of economic activity prior to a recovery
D. a particularly strong and protracted expansion

10. Business cycles in Australia are dated by the Melbourne Institute using either __________ or __________ criteria.
A. recession; expansion
B. peak; trough
C. potential output; unemployment
D. growth cycle; classical cycle