Chapter 13

Question 0

Causes of the business cycle

Answer 0

Changes in capital expenditures
Innovation and imitation
Monetary policy decisions
External shocks

Question 1

Phases of the business cycle

Answer 1

Recession

Expansion

Question 2

Black Tuesday

Answer 2

October 29,1929

Question 3

Between 1929&1933 the GNP declined nearly?

Answer 3

50%

Question 4

Average wage went from _____ cents to 5 cents an hour.

Answer 4

55

Question 5

During the Great Depression what % of the banks failed?

Answer 5

25%

Question 6

Causes of the Great Depression

Answer 6

Enormous gap in the distribution of income
Easy credit
Global economic conditions

Question 7

Increased government ___ and ____ brought U.S. Out of the depression

Answer 7

Spending

WWII

Question 8

Laws and agencies that were established to prevent another depression

Answer 8

Social security act of 1935
Minimum wage
Unemployment programs
Securities and exchange commission
Federal deposit insurance corporation

Question 9

Methods used to predict business cycles

Answer 9

Statistical series

Macroeconomic modeling

Question 10

Methods to measure inflation

Answer 10

Price index

Consumer price index

Question 11

Causes of inflation

Answer 11

Demand pull inflation
Cost push inflation
Wage price inflation
Excessive monetary growth

Question 12

Effects of inflation

Answer 12

Reduced purchasing power
Distorted spending patterns
Encourages speculation
Distorted distribution of income

Question 13

Kinds of unemployment

Answer 13

Frictional 
Structural
Technological 
Cyclical 
Seasonal.

Question 14

Unemployment rose _________

Answer 14

800%

Question 15

Unemployment can causes three things to happen

Answer 15

Uncertainty
Political instability
Social problems

Question 16

Milton Friedman

Answer 16

Received the Nobel prize for economics for his theories on economic stabilization