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Public Administration - Municipal BUS400 Lecture Notes - Lecture 13: Underconsumption, Government Spending, Business Cycle

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greenmuskrat329

28 Dec 2017

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Public Administration - Municipal

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Public Administration - Municipal BUS400

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Document Summary

The meaning of business cycles: business cycles: alternating periods of expansions and contractions of the economy, boom: a period of economic expansion, bust: a period of economic contraction. Phases of the cycle: trough: the lowest point in the business cycle, depression: a period characterized by low economic, expansion or recovery: the phase characterized by an activity and severe unemployment increase in employment, income, and economic activity. Phases of the cycle: peak: the highest point of the business cycle, recession: a phase characterized by a reduction in economic activity. Sectoral impact of business cycles: sectors that are particularly susceptible to downturns, durable consumer goods, construction, new capital goods, sectors that are not particularly susceptible to downturns, food, school supplies, medical and dental services. Theories of business fluctuations: capital-output ratio: the ratio of the value of capital to, the multiplier-accelerator: interaction between income the value of annual output. and investment magnifies the business cycle.

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Related Questions

A business cycle is the period of time in which:

1. the price level varies with real GDP.
2. a business is established and ceases operations.
3. there are four phases: peak, recession, trough, and recovery.
4. expansion and contraction of economic activity are equal.
5. none of these are true.

coralleopard200

16. Investment () includes:

A. The amount spent on new factories and machinery.

B. The amount spent on stocks and bonds.

C. The amount spent on consumer goods that last more than one year.

D. The amount spent on purchases of art.

17. Which of the following is true?

A. A depression is a recession that is mild and relatively brief.

B. The expansions and contractions of real-world business cycles last varying lengths of time and often differ in magnitude.

C. The timing of business fluctuations is regular and therefore easily predictable

D. During the contractionary phase of the business cycle, the rate of unemployment is generally quite low

18. If imports exceed exports, as in recent years, then exists

A. A trade surplus.

B. A trade deficit.

C. A trade imbalance.

D. Trade disequilibrium.

19. which can be approximated by the growth of the gross domestic product, ultimately determines the prevailing standard of living in a country

A. Trade balance.

D. Economic growth.

20. The difference between nominal GDP and real GDP is:

A. Nominal GDP measures actual productivity.

B. Nominal GDP adjusts for inflation.

C. Real GDP adjusts for inflation.

D. Real GDP excludes imports and exports.

silverhamster62

Use the following to answer questions 8-12:

8. Refer to thegraph above. A complete business cycle is represented by:
A) A to G B) O toC C) A to F D) C to F

9. Refer to thegraph above. A movement from point A to D represents a(n):
A) trough. B)peak. C) recession. D)expansion

10. Refer to the graph above. Amovement from point D to G represents a(n):
A) trough. B)downturn. C) recession. D)expansion

11. Refer to the graph above. Apeak occurs when the economy:
A) moves from point C to point F.C) reaches points C or F.
B) reaches points E or D D) reaches points A or B.

12. Refer to the graph above. Arecession occurs when the economy moves from point:
A) B to point E. B) C to pointF. C) A to point D. D) D topoint G.

13. Almost all economists agreethat during a(n) __________ economic policy __________ be used toimprove economic conditions
A) depression; should C) expansion; should not
B) recession; should D) boom; should not

14. Cyclical unemployment isproduced by:
A) a slowdown in economic activity.
B) economic restructuring.
C) the institutional structure of theeconomy.
D) an increase in the number of people enteringthe labor force.

15. The automation of anassembly line is likely to result in:
A) structural unemployment. C) cyclical unemployment.
B) frictional unemployment. D) seasonal unemployment.

16. The unemployment producedby fluctuations in economic activity is called:
A) frictional unemployment. C) natural unemployment.
B) cyclical unemployment. D) structural unemployment.

17. Macroeconomic policy isbelieved to be most effective in reducing:
A) frictional unemployment. C) cyclical unemployment.
B) natural unemployment. D) structural unemployment.