This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Cycles > Business Cycles – Quiz 10 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Business Cycles Quiz 10 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The more GDP increase from one year to the next, A) The worst the economy is doing. B) The healthier the economy is. C) Has no impact on the health of the economy. D) All of the above. Show Answer Correct Answer: B) The healthier the economy is. 2. The HIGHEST Point in business cycle A) Trough. B) Contraction. C) Recession. D) Peak. Show Answer Correct Answer: D) Peak. 3. What type of GDP uses a base year's prices in order to make fair comparisons? A) GDP per capita. B) Real GDP. C) Nominal GDP. D) None of above. Show Answer Correct Answer: B) Real GDP. 4. What is one limitation of GDP? A) It does not include intermediate goods. B) It does not show how the economy is doing over time. C) It does not include non-durable goods. D) It does not measure health and happiness. Show Answer Correct Answer: D) It does not measure health and happiness. 5. This is the term for the total amount of all goods and services in the economy that households, businesses, and government will buy at each level of prices? A) Aggregate Equilibrium. B) Aggregate Demand. C) Aggravated Surplus. D) Aggregate Supply. Show Answer Correct Answer: B) Aggregate Demand. 6. The four phases of the business cycle are: A) Upwards, Peak, Downwards, Lowest. B) Increase, Highest, Contraction, Trough. C) Expansion, Peak, Contraction, Trough. D) Expansion, Top, Decline, Bottom,. Show Answer Correct Answer: C) Expansion, Peak, Contraction, Trough. 7. Costco builds a new store in Noblesville, Indiana. Where would this show up in the GDP formula? (GDP=C+I+G+(X-M)) A) Investment (Business). B) Exports-Imports. C) Government Spending. D) Consumption (Consumer). Show Answer Correct Answer: A) Investment (Business). 8. In the post-maturity stage, they business may head in one of three directions A) Renewal, expansion, decline. B) Steady state, decline, renewal. C) Growth, expansion, decline. D) Decline, administration, economic downturn. Show Answer Correct Answer: B) Steady state, decline, renewal. 9. When inflation is high the ..... of the dollar decreases A) Validity. B) Purchasing power. C) Cost value. D) Importance. Show Answer Correct Answer: B) Purchasing power. 10. GDP declines during a(an) A) Peak. B) Contraction. C) Expansion. D) None of above. Show Answer Correct Answer: B) Contraction. 11. Which stage is often referred to as the riskiest stage of the life cycle? A) Seed. B) Startup. C) Maturity. D) Post-maturity. Show Answer Correct Answer: B) Startup. 12. ..... sector has seen the most convincing patterns of outperformance in the late cycle. A) Consumer Staples. B) Utilities. C) Health Care. D) Energy. Show Answer Correct Answer: D) Energy. 13. Sum of the employed and the unemployed A) Employed. B) Unemployment. C) Labor Force. D) None of above. Show Answer Correct Answer: C) Labor Force. 14. Business Cycle is defined as: A) Movement of the economy. B) Movement of the economy from one condition to another and back again. C) Has 4 phases. D) A business going around in a cycle. Show Answer Correct Answer: B) Movement of the economy from one condition to another and back again. 15. Growing inventory and decreasing sales growth is indicative of a country in the ..... stage of the business cycle. A) Early. B) Late. C) Mid. D) Recession. Show Answer Correct Answer: B) Late. 16. To calculate GDP, the government adds up A) Government spending. B) Consumer spending. C) Investments and (exports-imports). D) All of the above. Show Answer Correct Answer: D) All of the above. 17. The performance of which other goal(s) can be inferred from the business cycle? A) Full employment. B) Price stability. C) Both full employment & price stability. D) None of above. Show Answer Correct Answer: C) Both full employment & price stability. 18. Which of the following is not a stage of the business cycle? A) Expansion. B) Peak. C) Decline. D) Recession. Show Answer Correct Answer: C) Decline. 19. "Real" GDP more accurately measures changes in production than Nominal GDP because it accounts for ..... A) Increases in unemployment. B) Phases of the business cycle. C) Changes in price. D) Decreases in exports. Show Answer Correct Answer: C) Changes in price. 20. If GDP of the economy grows, what is MOST LIKELY to happen to sales and profitability of a business in the economy? A) Increase. B) Decrease. C) Stay the same. D) None of above. Show Answer Correct Answer: A) Increase. 21. In which of the following categories does a recession NOT cause a decline? A) Total Output. B) Income. C) Tax Rate. D) Employment. Show Answer Correct Answer: C) Tax Rate. 22. Individuals are unemployed due to a lack in skills that modern industries need, change in technology. A) Structural Unemployment. B) Seasonal Unemployment. C) Frictional Unemployment. D) Cyclical Unemployment. Show Answer Correct Answer: A) Structural Unemployment. 23. Unemployment Rate = A) Population / # of unemployed X 100. B) # of unemployed / # in the civilian labor force X 100. C) # in the civilian labor force / # of unemployed X 100. D) None of above. Show Answer Correct Answer: B) # of unemployed / # in the civilian labor force X 100. 24. What is the definition for inflation? A) The market value of all final goods and services produced in a nation during a period of time, usually a year. B) The increase of general prices over time. C) When people do not have jobs and are actively looking for one. D) None of above. Show Answer Correct Answer: B) The increase of general prices over time. 25. Because the business cycle directly measures growth over a period of time, what should the y-axis be labeled? A) GDP. B) GDP per capita. C) Real GDP. D) None of above. Show Answer Correct Answer: C) Real GDP. 26. In which phase would firms start to lay off workers A) Bust. B) Recession. C) Expansion. D) Bull. Show Answer Correct Answer: B) Recession. 27. Which of the following is a cause of a trough? A) A brand new product. B) A broken product. C) An expensive product. D) A severely outdated product. Show Answer Correct Answer: D) A severely outdated product. 28. What is the formula for calculating GDP if using the expenditure approach? A) Consumption + investment + government spending + net exports. B) Wages + interest + rent + profit. C) Add up all values added to the good. D) None of these. Show Answer Correct Answer: A) Consumption + investment + government spending + net exports. 29. Optimistic people will A) Help the economy. B) Hurt the economy. C) Not affect the economy. D) None of above. Show Answer Correct Answer: A) Help the economy. 30. All of the following are points on the business cycle EXCEPT A) Troughs. B) Peaks. C) GDP. D) Expansion. Show Answer Correct Answer: C) GDP. ← PreviousNext →Related QuizzesMacroeconomics QuizzesEconomics QuizzesBusiness Cycles Quiz 1Business Cycles Quiz 2Business Cycles Quiz 3Business Cycles Quiz 4Business Cycles Quiz 5Business Cycles Quiz 6Business Cycles Quiz 7Business Cycles Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books