Chapter 30 — Exercises

A1. Identify the four phases of the business cycle and one indicator that signals each. A2. The yield curve inverted in 2019 and a recession followed in 2020. Is this evidence that yield-curve inversions predict recessions, or was it coincidence (COVID was unpredictable)? A3. Classify each as demand shock or supply shock: (a) 2008 financial crisis, (b) 1973 oil embargo, (c) COVID shutdown, (d) 2001 dot-com bust. A4. Compare the 2008 and COVID recoveries. Why was COVID faster? A5. "Macroeconomic policy has solved the problem of recessions." Evaluate using the 2008 and COVID evidence. A6. Look up the NBER business cycle dates (nber.org). How many recessions has the U.S. had since 1945? What was the longest expansion? A7. Look up real GDP (FRED: GDPC1) since 1947. Identify every recession visible as a dip. A8. The "Great Moderation" thesis said recessions were becoming milder. Was the thesis correct before 2008? What happened to it?

Selected answers in appendices/answers-to-selected.md.