Test Review Business Cycle 1 A steady longterm

Test Review

Business Cycle #1 A steady, long-term increase in real GDP is A. economic growth. B. a depression. C. a peak. D. a recession.

Business Cycle #2 A period of economic growth as measured by a rise in real GDP is a(n) A. business cycle. B. peak. C. contraction. D. expansion

Business Cycle #3 A prolonged economic contraction that is not especially long or severe is referred to as a A. depression. B. recession. C. stagflation. D. trough.

Business Cycle #4 What is a business cycle? A. a period of increased economic growth B. a period of economic growth followed by economic contraction C. the amount of time it takes a business to produce its products D. a dangerous time for all businesses

Business Cycle # 5 What is a recession? a. A period when real GDP falls for at least 6 month b. A long a severe depression c. A mild and short expansion

Business Cycle #6 The stage in a business cycle when real GDP stops falling is A. expansion. B. the peak. C. contraction. D. the trough.

GDP Review # 1 GDP expressed in constant, or unchanging, prices is referred to as A. real GDP. B. nominal GDP. C. aggregate supply. D. aggregate demand.

GDP Review #2 The total amount of goods and services in the economy available at all possible price levels is the A. gross national product. B. gross domestic product. C. aggregate demand. D. aggregate supply.

GDP # 3 Suppose an economy's entire output is automobiles. In Year 1, the country's real GDP is $300, 000 and all manufacturers in the economy produce cars at $15, 000 each. In Year 2, all manufacturers produce cars at $16, 000 each. What is the real GDP in Year 2, if 20 cars are produced? A. $300, 000 B. $320, 000 C. $20, 000 D. $280, 000

GDP #4 Goods used in the production of final goods are a. Durable goods b. Nondurable goods c. Intermediate goods d. Final goods

GDP # 5 Which of the following is included in GDP? A. an intermediate good B. a service produced and used in another country C. a fish that you catch and eat yourself D. a fish that you buy at the market or store

Inflation #1 Inflation that is out of control is referred to as a. Hyperinflation b. Deflation c. Wage price spiral d. Cost push inflation

Inflation #2 If Julia invested $3, 000 at an annual interest rate of 5% and from last year to this year there has been a 4% inflation rate, then, after a year the purchasing power of her investment A. rose by 1%. B. fell by 1%. C. is 4%. D. is 5%.

Inflation #3 The measurement that shows how the average price of a standard group of goods changes over time is the a. Market basket b. Inflation rate c. Price index d. Core inflation rate

Inflation #4 The theory that inflation occurs when producers raise prices in order to meet increased costs is the a. Demand pull theory b. Cost push theory c. Quantity theory d. Wage price spiral

Inflation #5 Inflation reduces purchasing power because a. The same amount of money buys more goods and services b. The same amount of money buys fewer goods and services c. The market basket has to be changed every year d. There is not enough money in the economy

Inflation #6 The inflation rate is a. The ability to buy goods or services b. Measured in fixed dollars c. Not an important measure to economists d. The percentage change in price over time

Putting it Together #1 Business investment, interest rates and credit, consumer expectations, and external shocks are the four main factors that affect a. The business cycle b. Gross national product c. Gross domestic product d. Inflation

Putting it Together #2 What is the BEST measure of a nation’s standard of living? a. Real GDP per capita b. Population growth c. Savings d. Nominal GDP per capita

Putting it Together #3 During the Contraction Phase of the Business Cycle, GDP a. Is rising b. Stops rising c. Is always falling d. Is not changing

Putting it Together #4 The stage of the business cycle where GDP stops falling is a. Expansion b. The peak c. Contraction d. The trough

Putting it Together #5 Typically, when unemployment falls to very low levels a. Inflation is unchanged b. Inflation increases c. A period of deflation follows d. The purchasing power of a dollar increases

Putting it Together #6 Which statement best describes full employment? a. Everybody who wants a job has a job b. There is no unemployment at all c. There is no cyclical unemployment d. There is no structural unemployment

Unemployment #1 Unemployment that occurs as a result of harvest scheduled or vacations, or when industries slow or shut down during a certain part of the year is called a. Frictional b. Seasonal c. Structural d. cyclical

Unemployment #2 A technician specializing in the repair of video cassette players lost her job several years ago when then DVD player became more affordable for consumers. This is a case of a. Frictional unemployment b. Seasonal unemployment c. Structural unemployment d. Cyclical unemployment

Unemployment #3 Unemployment that occurs when people take time to find jobs is called a. Frictional b. Seasonal c. Structural d. cyclical

Unemployment #4 What will most likely still occur when the economy has achieved full employment? a. frictional, seasonal, and cyclical unemployment b. Seasonal, structural, and cyclical unemployment c. Frictional, seasonal, and structural unemployment d. None of the above are correct

Unemployment #5 If there were a recent downturn in the economy and some economists predicted a recession in the near future, then there is a strong possibility that there will be a a. Rise in frictional unemployment b. Fall in structural unemployment c. Rise in structural unemployment d. Rise in cyclical unemployment

Unemployment #6 Discouraged workers are a. Not counted in unemployment rate b. Counted in the unemployment rate c. Included in the calculation of the labor force d. Considered unemployed

USA Test Prep #1 Which of these is an economic indicator used to tell how an economy is doing? a. Equilibrium price b. Consumer price index c. Job satisfaction rate d. Presidential approval rate

USA Test Prep #2 Which of these will have an effect on the GDP of the country? a. Monty buys a Picasso painting b. Lisa loses $20. 00 in a bet with Bart c. Ned fixes Jay’s car without buying any new parts d. The Shelbyville Whoopee Cushion company makes 1, 000 to export to China

USA Test Prep #3 The US Government has decided to issue federal income tax rebates to taxpayers. What is MOST LIKELY the goal of these rebates? a. Increase consumer spending b. Increased transfer payments c. Reduction in the employment rate d. Reduction in military budget

USA Test Prep #4 The Consumer Price Index (CPI) is best used to determine a. The Dow Jones Index b. The rate of inflation c. The unemployment rate d. Reduction in the military budget

USA Test Prep #5 Ned is a typewriter repairman. As typewriters are being replaced by computers Ned finds less and less work. What type of unemployment is Ned experiencing? a. Seasonal b. Cyclical c. Frictional d. Structural

USA Test Prep #6 Over a three year period, the US experienced an increase in the Real GDP, low Inflation, and declining unemployment rate. For this period, the US a. Was in an economic trough b. Was in a stagnant economic period c. Appeared to be entering a recession d. Was in the middle of an economic boom