This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Cycles > Business Cycles – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Business Cycles Quiz 1 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. GDP that is adjusted for inflation A) Price level. B) Net national product. C) Real GDP. D) Nominal GDP. Show Answer Correct Answer: C) Real GDP. 2. Which of the following is a coincident indicator, that helps economists get a better idea of where we are right at this moment in the business cycle? A) Personal income. B) The ratio of how much consumers owe to measures of personal income. C) Stock prices. D) None of above. Show Answer Correct Answer: C) Stock prices. 3. In which part of the GDP calculation does this fit?Australia exported $ 6 billion worth of goods in 2018, but imported $ 10 billion in goods. A) Net exports. B) Consumer spending. C) Investment spending. D) Government spending. Show Answer Correct Answer: A) Net exports. 4. On a business cycle graph, what is the lowest point of the curve where there is the lowest level of GDP? A) Bust/Trough/Slump. B) Recovery. C) Recession. D) Peak. Show Answer Correct Answer: A) Bust/Trough/Slump. 5. Which option presents the business cycle in the correct order A) Peak, expansion, trough, recovery. B) Trough, expansion, peak, contraction. C) Peak, contraction, recovery, trough. D) Trough, contraction, peak, recovery. Show Answer Correct Answer: B) Trough, expansion, peak, contraction. 6. If GDP decreases and is negative, the would mean that A) The economy is not healthy. B) Businesses are selling less. C) There are fewer jobs. D) All of the above. Show Answer Correct Answer: D) All of the above. 7. GDP that is NOT adjusted for inflation A) Real GDP. B) Net national product. C) Price level. D) Nominal GDP. Show Answer Correct Answer: D) Nominal GDP. 8. Why is real GDP more accurate than nominal GDP? A) It's adjusted for price changes. B) It's adjusted for depreciation. C) It includes unpaid and paid work. D) It includes unrecorded business. Show Answer Correct Answer: A) It's adjusted for price changes. 9. On a business cycle graph, what is the phase called when there is an upward slope and GDP is increasing? A) Recession. B) Shock. C) Recovery. D) Bust. Show Answer Correct Answer: C) Recovery. 10. Which of the following statements would be classified as "full employment'? A) Everyone who wants to work have full time jobs. B) Approximately 95% of people have a job. C) Everyone who wants to work has a job. D) People who have been hunting for a job for a long time. Show Answer Correct Answer: B) Approximately 95% of people have a job. 11. Read the following headline and choose the condition that correspond with the business cycle.Interest rates at a low of 2% cause consumers to take out loans and buy homes. A) Growth. B) Peak. C) Trough. D) Contractionary. Show Answer Correct Answer: A) Growth. 12. Which phase of the business cycle is missing:Recovery, Boom, Recession A) Upward Slope. B) Peak. C) Shock. D) Bust. Show Answer Correct Answer: D) Bust. 13. What is the difference between real GDP per capita and real GDP? A) Real GDP per capita takes into unemployment. B) Real GDP per capita takes into exchange rates. C) Real GDP per capita takes into account savings. D) Real GDP per capita takes into account population. Show Answer Correct Answer: D) Real GDP per capita takes into account population. 14. Which is a shortcoming of using GDP as a measure of the economy? A) GDP does not include work done at home such as house renovations. B) GDP always includes inflation. C) GDP isn't reliable. D) GDP is commuted in dollars. Show Answer Correct Answer: A) GDP does not include work done at home such as house renovations. 15. A literary editor leaves her job in New York to look for a new job in San Francisco. A) Cyclical. B) Structural. C) Frictional. D) Not counted. Show Answer Correct Answer: C) Frictional. 16. If GDP falls for at least 2 Quarters, it is considered what stage of the business cycle? A) Recession. B) Prosperity. C) Recovery. D) Expansion. Show Answer Correct Answer: A) Recession. 17. A deposit made into a bank is considered ..... of that bank. A) An asset. B) Capital. C) An investment. D) A liability. Show Answer Correct Answer: D) A liability. 18. Which of the following would count towards GDP? A) A previously owned car. B) Stocks and bonds. C) Items produced by a US company in another country. D) A newly built home. Show Answer Correct Answer: D) A newly built home. 19. When is the highest point of real GDP happen? A) Trough. B) Peak. C) Expansion. D) Contraction. Show Answer Correct Answer: B) Peak. 20. Inflation measures ..... A) The value of all final goods and services produced. B) An increase in the general price level. C) The percentage of people looking for work that can't find it. D) The economic freedom an economy offers. Show Answer Correct Answer: B) An increase in the general price level. 21. Jeff was replaced by a computer. He is experiencing what type of unemployment? A) Seasonal. B) Cyclical. C) Structural. D) Frictional. Show Answer Correct Answer: C) Structural. 22. What phase of the business cycle are we in today? A) Trough. B) Recessionary. C) Peak. D) Expansionary. Show Answer Correct Answer: D) Expansionary. 23. A worker who was laid off due to a downturn in the business cycle would be considered A) Frictionally unemployed. B) Structurally unemployed. C) Cyclically unemployed. D) Seasonally unemployed. Show Answer Correct Answer: C) Cyclically unemployed. 24. Use the following data to determine the unemployment rate:Total population 1000Full time workers 500Part time workers 200Discouraged workers 10Unemployed 70What is the unemployment rate? A) 10%. B) 9%. C) 11%. D) 8%. Show Answer Correct Answer: B) 9%. 25. Type of unemployment that occurs when workers skills do not match those needed for the jobs available. A) Seasonal Unemployment. B) Structural Unemployment. C) Frictional Unemployment. D) Cyclical Unemployment. Show Answer Correct Answer: B) Structural Unemployment. 26. Read the following headline and choose the condition that correspond with the business cycle.Due to factory closures unemployment has risen to a five year high of 10% A) Peak. B) Trough. C) Growth. D) Contractionary. Show Answer Correct Answer: B) Trough. 27. During times of economic recession the unemployment rate usually A) Decreases. B) Increases. C) Stays around 25%. D) Stays the same. Show Answer Correct Answer: B) Increases. 28. Which of the following is not a phase in the business cycle? A) Trough. B) Shutdown. C) Peak. D) Expansion. Show Answer Correct Answer: B) Shutdown. 29. An investor with holdings primarily in ..... sectors will perform best in the recession stage of the business cycle. A) Telecom & Health Care. B) Financials & Financials. C) Consumer Discretionary & Consumer Staples. D) Consumer Staples & Energy. Show Answer Correct Answer: A) Telecom & Health Care. 30. "Dunder Mifflin Corporation Fires 5, 000 Employees" This headline affects which economic indicator the most? A) Consumer Price Index. B) Unemployment rates. C) Consumer Spending. D) Inflation. Show Answer Correct Answer: B) Unemployment rates. Next →Related QuizzesMacroeconomics QuizzesEconomics QuizzesBusiness Cycles Quiz 2Business Cycles Quiz 3Business Cycles Quiz 4Business Cycles Quiz 5Business Cycles Quiz 6Business Cycles Quiz 7Business Cycles Quiz 8Business Cycles Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books