Economics:
Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
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Chapter 7, Problem 11E
To determine

To write:

A brief paragraph on the economic reason behind change in each leading indicator, as shown in the Table 1, before real output changes.

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Plot these data points, and identify the four phases of the business cycle. Give a theory that may explain the cause of the observed business cycle. What are some of the consequences of a prolonged decline in real GDP? Is the decline in real GDP from $1,000 billion to $500 billion a recession?
Consider the following statements about the business cycle.   Which of the following statements is incorrect ?   A. A rise in economic activity from the cycle trough to the peak indicates that the economy is in an expansion.   B. A fall in economic activity from the cycle peak to the trough indicate that the economy is in a recession.   C. The business cycle is a regular fluctuation of real GDP around potential GDP that is predictable.   D. The business cycle is a periodic cycle in real GDP and employment.
Economists use the phrase "business cycle" when referring to fluctuations in
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