SOLVED

1) GDP is a good proxy for the business cycle itself since ________. A) its real consumption spending component is procyclical and coincident B) its real investment spending component is procyclical and coincident C) it typically goes up in a boom and down in a recession D) all of the above E) none of the above 2) A characteristic of the unemployment rate is that ________. A) it typically goes up in a recession B) it typically goes down in a boom C) it is not clear whether it is a leading or a lagging indicator D) all of the above E) none of the above 3) A characteristic of the inflation rate is that ________. A) it typically goes down in a boom B) it typically goes up in a recession C) it is a lagging indicator D) all of the above E) none of the above 4) A characteristic of stock prices is that ________. A) they tend to go up on the upswing of the cycle B) they tend to go down on the downswing of the cycle C) they are a leading indicator D) all of the above E) none of the above 5) The interest rates paid on Treasury bills ________. A) go down in booms B) go up in recessions C) are a coincident indicator D) all of the above E) none of the above 6) Interest rates spreads between long-term and short-term Treasury bills ________. A) are countercyclical B) are good predictors of recessions C) are a lagging indicator D) all of the above E) none of the above 7) Interest rates spreads between long-term and short-term Treasury bills ________. A) are procyclical B) are not a good predictor of recessions C) are a lagging indicator D) all of the above E) none of the above 8) Interest rates spreads between corporate and government bonds ________. A) are procyclical B) have the same characteristics as the government interest rate spreads C) are countercyclical D) all of the above E) none of the above 9) Which of these economic variables is procyclical? A) consumer spending B) stock prices C) the government bond spread D) all of the above E) none of the above 10) Which of these economic variables is procyclical and coincident? A) consumer spending B) stock prices C) the government bond spread D) all of the above E) none of the above