SOLVED

11) The demand for durable goods A) has decreased over time. B) declines by a greater percentage than does GDP during a recession. C) declines by a smaller percentage than does GDP during a recession. D) rises by a greater percentage than does GDP during a recession. 12) Purchases of which of the following goods would be dramatically reduced during a recession? A) tomatoes B) ink pens C) gasoline D) refrigerators 13) During a recession, spending on ________ tends to fall more dramatically than spending on ________. A) necessities; luxuries B) durable goods; nondurable goods C) nondurable goods; durable goods D) food; cars 14) Purchases of Huggies diapers should A) remain fairly constant over the business cycle. B) increase in recessions and decrease in expansions. C) decrease in recessions and increase in expansions. D) increase in recessions and remain constant in expansions. 15) The effect of a recession on a company like Boeing Aircraft is such that A) sales decline more sharply for Boeing as compared to firms that do not produce durable goods. B) profits fall less sharply as compared to firms that do not produce durable goods. C) the decline in sales is more short-lived as compared to firms that do not produce durable goods. D) there is no difference in the impact of the recession on its profits as compared to firms that do not produce durable goods. 16) Inflation tends to ________ during the expansion phase of the business cycle and ________ during the recession phase of the business cycle. A) increase; decrease B) decrease; increase C) decrease; decrease further D) increase; increase further 17) Which of the following is a correct statement? A) Inflation is measured as the percent change in the CPI. B) The CPI is a widely used measure of the inflation rate. C) Real GDP is our best measure of economic growth. D) The PPI measures inflation as experienced by producers. 18) When the economy enters a recessionary phase of the business cycle, unemployment tends to A) decrease. B) increase. C) be unchanged. D) change in the same direction as the rate of inflation. 19) Typically, as an economy begins to emerge from a recessionary phase of the business cycle, A) unemployment falls immediately. B) unemployment continues to rise. C) inflation begins to fall. D) investment begins to fall. 20) Since the 1950s, A) the United States has not experienced a business cycle. B) U.S. business cycle fluctuations have becomes more volatile. C) U.S. business cycle fluctuations have become milder. D) U.S. business cycle fluctuations have not changed.