Question 1

Historical evidence for the U.S. economy indicates that

Answer

recessions have occurred roughly once every six years since the 1960s. 

the unemployment rate usually decreases during a recession and increases shortly after the recession ends.

real GDP usually remains roughly constant during a recession and decreases shortly after the recession ends.

changes in real GDP over the business cycle are largely attributable to changes in investment over the business cycle.

Question 2

Which of the following is most commonly used to monitor short-run changes in economic activity?

Answer

the inflation rate

real GDP

aggregate demand

aggregate supply

Question 3

During recessions investment

Answer

falls by a larger percentage than GDP.

falls by about the same percentage as GDP.

falls by a smaller percentage than GDP.

falls but the percentage change is sometimes much larger and sometimes much smaller.