What are the four phases of the business cycle? How long do business cycles last? Why does the business cycle affect output and employment in capital goods industries and consumer durable goods industries more severely than in industries producing consumer nondurables?
2. How, in general, can a financial crisis lead to a recession? How, in general, can a major new invention lead to an expansion?
3. How is the labor force defined and who measures it? How is the unemployment rate calculated? Does an increase in the unemployment rate necessarily mean a decline in the size of the labor force? Why is a positive unemployment rate—one more than zero percent—fully compatible with full employment?
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