Chapter 41
How to Measure Instability
450. Wesley Mitchell coined the concept of a cycle relative. What is a cycle relative?
a. The cycle relative is defined as the average of an economic series for one whole cycle.
b. The cycle relative is defined as the original data in a stage divided by the number of
stages.
c. The cycle relative is defined as the original data in a stage divided by the cycle base.
d. The cycle relative is defined as the relative number of stages in a cycle.
451. What is meant by capacity utilization?
a. How much productive capacity can be effectively utilized.
b. How much productive capacity is currently being utilized.
c. The average utilization of capacity over the business cycle.
d. The capacity for utilizing something.
452. Many economists argue that the unemployment rate tends to understate the actual amount
of unemployment. Why?
a. The unemployment rate excludes persons who work in the service sector.
b. The unemployment rate excludes persons who are unable to find work.
c. The unemployment rate excludes persons who want to work but have given up looking
for a job.
d. The unemployment rate excludes workers who are also students.
453. Wesley Mitchell divided the business cycle into 9 stages. Mitchell called the lowest stages
of the cycle
a. the initial peak and the initial contraction.
b. the initial trough and the final trough.
c. the cycle relative and the cycle base.
d. the amplitude and the capacity.
454. What is meant by the cycle base?
a. the original data in a stage divided by the cycle relative.
b. the capacity utilization during the initial trough.
c. the average of an economic series for one whole cycle.
d. the lowest point of the cycle.
Table 41a
Real GDP
(Billions of 2000 dollars)
Year
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
1970
$ 3,759.8
1971
3,864.1
3,885.9
3,916.7
3,927.9
1972
3,997.7
4,092
.1
4,131.1
4,198.7
1973
4,305.3
4,355.1
4,331.9
4
,373.3
1974
4,335.4
4,347.9
4,305.8
4,288.9
1975
4,237.6
455.
terminology, what is the value for Stage 1?
a. $3,759.8 billion
b. $4,237.6 billion
c. $4,373.3 billion
d. $4,147.5 billion
456.
terminology, what is the value for the cycle base?
a. $3,759.8 billion
b. $4,237.6 billion
c. $4,373.3 billion
d. $4,147.5 billion
457. Table 41a gives quarte
terminology, what is the value for Stage 5?
a. $3,759.8 billion
b. $4,237.6 billion
c. $4,373.3 billion
d. $4,147.5 billion
458. Table 41a gives quarterly GDP data for a complete business cycle. Using M
terminology, what is the value for Stage 9?
a. $3,759.8 billion
b. $4,237.6 billion
c. $4,373.3 billion
d. $4,147.5 billion
459. Table 41a gives quarterly GDP data for a complete business cycle.
terminology, what is the value for the cycle relative in Stage 1?
a. 105.4
b. 90.6
c. 86.2
d. 55.1