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CA Foundation Business Cycles — practice questions — page 2

Explore 55 free Business Cycles questions in CA Foundation Business Economics. Open each question or exercise to read its content, reference answers and available explanation.

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Business Cycles questions and exercises with answers

Showing questions 31–55 of 55.

In credit-cycle theory, the bursting of speculative bubbles is seen as the proximate cause of:Read the answer and worked solution →Real business cycle theory is most associated with:Read the answer and worked solution →In real business cycle models, fluctuations arise from random changes in:Read the answer and worked solution →The product based theory of economic cycles originates from the work of:Read the answer and worked solution →The electoral business cycle theory holds that incumbents:Read the answer and worked solution →The partisan business cycle results from successive governments with:Read the answer and worked solution →The Austrian School blames business cycles on excessive issuance of:Read the answer and worked solution →In the Austrian view, artificially low interest rates cause resources to be:Read the answer and worked solution →An inverted yield curve is often a harbinger of:Read the answer and worked solution →Since the 1940s, governments' efforts to mitigate the cycle fall under:Read the answer and worked solution →In the Keynesian view, recessions are caused by inadequate:Read the answer and worked solution →Which action is expansionary fiscal policy during a recession?Read the answer and worked solution →Increasing the money supply to fight a recession is called:Read the answer and worked solution →Robert Lucas argued that the welfare cost of business cycles is:Read the answer and worked solution →Friedman said the Fed turned a recession into the Great Depression by:Read the answer and worked solution →The 1970s stagflation discredited the use of the:Read the answer and worked solution →The stability and growth of the 1980s and 1990s came to be called the:Read the answer and worked solution →Which years mark the Great Depression in the economic history of the West?Read the answer and worked solution →A one-off change such as a worker strike over a year or two is usually regarded as:Read the answer and worked solution →Compared with long-term trends, business cycles are usually seen as a:Read the answer and worked solution →A recession is best described as a business cycle:Read the answer and worked solution →The UK and Canada define a recession as GDP falling for:Read the answer and worked solution →A recession with GDP down by 10 percent, or lasting three or four years, is called:Read the answer and worked solution →A short, sharp contraction followed by rapid recovery is called which shaped recession?Read the answer and worked solution →Double-dip recessions are described as which shape?Read the answer and worked solution →

Worked practice questions

In credit-cycle theory, the bursting of speculative bubbles is seen as the proximate cause of:

  1. Expansions
  2. Trade surpluses
  3. Tax reforms
  4. Depressions
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Correct answer: D. Depressions

The theory sees net credit contraction and bursting bubbles as leading to recessions and, if persistent, depressions.

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Real business cycle theory is most associated with:

  1. Kydland and Prescott
  2. Burns and Mitchell
  3. Keynes and Hicks
  4. Marx and Engels
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Correct answer: A. Kydland and Prescott

Finn Kydland and Edward Prescott are the economists most tied to real business cycle models.

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In real business cycle models, fluctuations arise from random changes in:

  1. Money supply growth
  2. Total factor productivity
  3. Bank rate changes
  4. Exchange rate shifts
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Correct answer: B. Total factor productivity

These models attribute fluctuations to random shifts in total factor productivity, such as technology or regulatory changes.

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