Question

1)Which of the variables areprocyclical (select all correct answers)
a.​ consumption - b. investment- c. employment- d. labor productivity- e. government expenditures
​2) consumption is less volatile than GDPbecause ( select all correct answer)
a.it is one of the expenditure GDP components
b.people spend less when they receive less income
c.many consumption components are hard to adjust (such as house, utilities, etc.)
d.people can save bigger fraction of their income in good time and dissave/borrow in bad time to smooth consumption over time
3) the fact that employment tends to lag output suggets (select all correct)
a.recessions tend to occur because of changes in labor market conditions making more difficult for people to find a job
b.recessions tend to occur because people willingness to work (affecting labor supply) varies over time
c.during recessions, firms respond to worsening economic situations by cuttting employment
d. none of th above
4) prices are countercyclical, this suggest that (select all correct)
a. recessions tend to be supply driven
b. recessions tend to be demand driven
c. price control can be an effective policy to use in recession
d.markets are not competitive