1.In which phase of the business cycle is the U.S. economy currently in?

2.When did the current recession start (i.e., in which month)?

3.Has the recession ended? If so, when (i.e., in which month)?

4.When did the current expansion begin (i.e., in which month)?

5.What has been happening in the economy during the Third Quarter 2021 (i.e., the current quarter?

6.Has this been a V-recession?

7.Will this be a "double-dip" recession?

8.Why don't we have answers to many of the questions above? How does this affect the ability of the government to engage infine tuningthe economy?

9.What the sources of the "two bind spots."

10.What is adouble dip recession? How common are they? How common is the fear of a double dip recession?

11.How long did the most recent expansion/recovery last? ___________ How does this compare to the average length of U.S. recessions since 1854? __________.

12.What do the last four recoveries/expansions (that is, the current recovery/expansion and the previous three recovery/expansions), suggest about a new trend in the U.S. economy regarding the length of typical recoveries/expansions?

13.Can you read the business cycle table? For example, whatcritical point in the business cycle occurred in January 1920?

14.Can you read the business cycle table? For example, what critical point in the business cycle occurred in the November 1982?

15.Can you read the business cycle table? For example, how long did the recession that started in October 1873 last? ____ months

16.The decline in real GDP that accompanies a recession is usually measured in low single digits. What was the percent decline in real GDP in the U.S. from 1929 to 1933?

17.The "end" of the Great Depression troubled most people. Why?

18.President Kennedy took office on January 20, 1961 and spent much of his administration promoting a tax cut to counter a recession. Go to the table in Chapter 6 that shows the NBER's dating of the U.S. business cycle. How long did the recession last after Kennedy took office?

19.What was President Kennedy's "unofficial" working definition of a "recession" when he argued for his tax cut? (Don't simply say that it was "unofficial" - what did Kennedy base his determination on?)

20.President Kennedy proposed a tax cut in order to address the recession that he claimed was plaguing the economy during his presidential term. Was President Kennedy was confused or misinformed about the high unemployment rate that he claimed was a feature of the on-going recession that he was addressing? Use your understanding of "jobless recoveries" to make the case that Kennedy was confused or misinformed.

21.What will always happen to a government budget deficit in a recession?

22.In a typical recession, which are more volatile, consumption or investment expenditures?

23.During a typical recovery from a recession, how will most interest rates behave?

24.What is a V-shaped recession and how does it differ from a U-shaped recession?

25.As a benchmark, how long have U.S. recessions averaged during 1854-2009?

26.As a benchmark, how long have U.S. expansions averaged during 1854-2009?

27.The expansion that ended in 1990 lasted _________________ months.

28.During the Reagan recession in the early 1980s, the unemployment rate rose to a monthly high of ____________ percent. During the Obama recession the unemployment rate rose to a monthly high of__________ percent.

29.How does the severity of the decline in real GDP during the Obama recession compare to the decline during the Great Depression? _______________________________________. How does it compare to the decline during the Reagan recession?

30.A financial crisis coupled with a recession seems to affect the severity and duration of the recession. How?

31.How does the pace of the recovery in the (current) Obama recession compare to the recovery from the Reagan recession?

32.How are recessions usually shown in time series graphs?

33.The U.S. business cycle can be traced back to the mid-1850s. However, the U.S. as a nation can be traced back to the 1780s. Why do we not discuss the U.S. business cycle from 1780 - 1850?

34.Why did Schumpeter think that the recovery from the depths of the Great Depression was so weak and took so long? _______________________. Schumpeter died more than a half century ago, but if he were around today, do you think he would agree with Mr. Obama or Mr. Reagan? _________________. (See the Osgood File in the Lecture.)

35.Compared to President Reagan, President Roosevelt and President Obama shared a very different view about the need for government to intervene in a downturn. Their policies reflected this view. However, Roosevelt and Obama also experienced__________________________________________ recoveries compared to the recovery from the Reagan Recession.

36.What did Jevons think caused the business cycle?

37.Suppose that you have been asked to compare the problem of bank failures during the Obama recession with the past. How do the number of bank failures in the Obama recession compare to the 1930s or the Reagan recession?

38.Suppose the U.S. government does very little to address the current recession. Based on his speeches, what did Mr. Obama think would happen to the economy?

39.In many respects, the Obama Recession and the Reagan Recession are very similar. However, the ideology and policies of President Reagan and President Obama are very different. What is the main difference between the two on the role of government in promoting or stimulating a recovery from a recession?

40.How long was the last recession in the U.S. economy? (i.e., the Obama recession)? _________ months. How does this compare to the benchmark for a typical recession? _________________

41.As a bench mark, during a "typical" U.S. recession we should expect the unemployment rate to rise to about ____ percent. During the worst year of the Great Depression in the United States, unemployment reached _____________.

42.The Great Depression affected virtually all countries around the world except one. Which country managed to escape the Great Depression?

43.What will always happen to a current account trade deficit during a recovery from a recession?

44.What will always happen to a government budget surplus as the economy goes into a recession?

Chapter 7

1. What are the requirements for an unemployed worker to actually be counted as unemployed in the Household Survey?

1. What are the requirements for an employed worker to actually be counted as employed in the Household Survey?

47.What reporting period do the latest employment/unemployment reports cover or refer to? ______________

48.What is the current unemployment rate for the U.S. economy reported in the latest employment/unemployment reports? __________

49.When we reach full employment in the U.S. economy today, what will the unemployment rate be?

50.As a benchmark, how many jobs must be created each month in the U.S. economy to keep the unemployment rate from rising?

51.How many new jobs were created in the U.S. in the latest reporting period? ________________. What was the average number of new jobs created monthly in 2019? ___________________. What was the average number of new jobs created monthly in 2018? ___________________. Are these new-jobs-created numbers high or low? Explain your answer. ____________________________. How does the most recent Employment Reports compare to the Employment Reports from January 2020? _________________________

52.How many discouraged workers were counted in the latest employment/unemployment reports? _____________. How does this compare to January 2020? _____________________. Are discouraged workers counted as "unemployed" in the unemployment rate? _____________________

53.How does the Great Depression in the U.S. compare to our benchmarks for the business cycle and unemployment?

54.Ceteris paribus, how fast does real U.S. GDP have to grow each year in order to keep unemployment from rising?

55.Many European countries have enacted laws restricting the ability of firms to reduce their labor force through cut-backs and lay-offs. These policies have been well-intended, but they have had an unanticipated consequence; these restrictions tend to reduce ________________________________________.

56.As a consequence of European efforts to minimize "churn," most European economies have had "full-employment levels of unemployment" that are _____________________ than the U.S. full-employment level of unemployment.

57.Danish labor market reforms are referenced in the Lecture. These reforms attempt to make it easier for firms to hire and fire workers. Which of these two - easier to hire or easier to fire - is the primary or critical dimension of the reforms? Why? (This is not an essay - zero in on the core issue).

58.Before the Danish labor market reforms in 1995, how long could Danish workers collect unemployment benefits before being cut off? ___________________. How did this affect the Danish NAIRU? ____________________________.

59.In theBusiness Weekgraph cited in the Lecture, Denmark continues to record strong job growth. How is this related to the Danish Reforms?

60.Competition takes many different forms. "Churn" is a good example of which type of competition?

61.In its Employment Report issued on April 6, 2007, the Bureau of Labor Statistics (BLS) announced that the U.S. economy had created 180,000 "new jobs" in March 2007.Based on your understanding of "churn," identify what happened to jobs created and jobs lost in March 2007. (Be sure that your answer conveys the essence of "churn")

62.In the current recovery, how many months did it take for the economy to recover the 8 million jobs that were lost in the recession? ___________.How does this compare to the job recovery following the Reagan recession in the early 1980s? ______________________________________________

63.Which type of unemployment:

a.includes a person who is fired from her job? ____________

b.includes a person who quits in order to find a better job?________

c.includes a person who has given up looking for a job because he thinks it is just a waste of time?____________

d.includes a person who is laid-off from a fish cannery that shuts down during the off-season? ______________

e.includes a person who cannot find a job because she lacks basic job skills and job experience? ________________

f.includes a person who quits work in order to stay home in order to care for a family and household? _____________

g.includes a person who loses a job due to lay-offs during a recession? ____

64.Which type of unemployment is the only type of unemployment that might be significantly reduced by a government policy of stimulating the economy?

65.Seasonal unemployment is measured in the unemployment rate. What would it take in order to get rid of all seasonal unemployment?

66.Why should you never watch the unemployment rate during a recovery from a recession in order to gauge the extent and strength of the recovery?

67.What economic statistic does the general public always watch to gauge the extent and strength of a recovery from a recession?

68.Suppose that the U.S. economy is in a recession and the unemployment rate is at 10.5%. One of your co-workers claims that the government (that is, the BLS) does not accurately measure "discouraged workers" and that the true unemployment rate is easily double the reported rate of 10.5 %. Why is your co-worker either correct or incorrect?

69.It is very common to see the unemployment rate actually increase as the economy begins to recover (i.e., after the trough). What causes the unemployment rate to rise at this time?

70.How could George H.W. Bush, the U.S. president with the highest public approval ratings in the post-WWII period, loose his re-election bid in 1992? In other words, how did the recession of 1990-91 and the subsequent recovery affect the presidential election held in November of 1992?

71.The original Phillips Curve depicted by Almarin Phillips sought to show a relationship between unemployment and _________________________. Subsequent versions of the Phillips Curve usually depict a relationship between unemployment and __________________________.

72.How good was the original "fit" of the data for the Phillips Curve for the U.S. economy in the 1960s? _______________ How good was the fit of the data for the Phillips Curve for the U.S. economy after the 1960s? ____________________

73.During the last two recessions before the most recent Obama recession, the U.S. unemployment rate rose slightly above 8% in the earlier recession and almost reached 8% in the most recent recession. Everyone who lives through a recession will tell you that it was "recession from hell," but how would you describe their severity? (Hint: Use the benchmark.)

1. Over the past decade, the U.S. economy has experienced permanent job losses amounting to about _____________ jobs per year. Over the past decade, the U.S. economy has created about _____________ jobs per year. (Hint: See the benchmarks.)

75.Many countries around the world are worried about immigrants taking jobs away from native-born workers. Recent studies have shown that this is a bigger problem in Europe than in the U.S. This recent research suggests that immigrants (both legal and illegal) will only have a net take away effect on employment if labor markets are __________________________________________

76.In the 20^thcentury, only two countries stood out in terms of robust job creation. The two countries were a) ___________________ and b) ___________________

77.What type of unemployment would the minimum wage impact? ________________. What type of unemployment would better job information programs impact? __________________________

1. What type of unemployment might be reduced by policies that improve job searching?

1. Education and job training programs would probably have the biggest impact on _____________ unemployment and ___________ unemployment.

1. Increasing the number of government jobs might put more people to work in government jobs, but the increase in __________________ needed to pay for these jobs might reduce overall employment.