Chapter 30 — Quiz

Q1. The four phases of the business cycle are: a) Growth, peak, decline, recovery b) Expansion, peak, recession, trough c) Boom, bust, stagnation, recovery d) Inflation, deflation, growth, decline Q2. A leading indicator: a) Moves after the economy b) Moves before the economy c) Moves with the economy d) Never changes Q3. A demand shock causes recession by: a) Disrupting supply b) Reducing aggregate spending c) Increasing exports d) Raising wages Q4. The 2008 recession was primarily caused by: a) An oil shock b) A financial crisis c) A pandemic d) Fiscal austerity Q5. The COVID recession recovered faster than 2008 because: a) COVID was less severe b) The fiscal response was much larger ($5T vs $800B) and the cause was temporary c) Interest rates were higher d) Trade was stronger Q6. The NBER: a) Sets interest rates b) Officially dates U.S. recessions c) Controls the money supply d) Regulates banks Q7. An inverted yield curve historically: a) Has no predictive power b) Has predicted almost every U.S. recession since 1960 c) Causes recessions d) Only occurs during expansions

SA1. Distinguish demand shocks from supply shocks with examples. SA2. Why was the 2008 recovery so slow compared to COVID? SA3. What ended the "Great Moderation"?

TF1. All recessions have the same cause. (T/F) TF2. The unemployment rate is a leading indicator. (T/F) TF3. Policy can prevent all recessions. (T/F)

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