Business Cycles Quiz 12 (20 MCQs)

Quiz Instructions

Select an option to see the correct answer instantly.

1. Taxing & spending to slow the economy is referred to as

Correct Answer: C) Contractionary policy.

2. Indianapolis purchases a new fire truck. Where would this show up in GDP formula? (GDP=C+I+G+(X-M))

Correct Answer: C) Government Spending.

3. Recurring periods of expanding and contracting economic activity

Correct Answer: B) Business cycle.

4. When an individual is unemployed because they are looking for a new job.

Correct Answer: A) Frictional Unemployment.

5. If GDP of the economy grows, what is MOST LIKELY to happen to congestion, pollution, and transport issues in the economy?

Correct Answer: A) Increase.

6. Which of the following is NOT a business cycle indicator?

Correct Answer: C) Out of date products.

7. What is considered "profit" in the GDP income approach?

Correct Answer: C) The remaining income after all expenses have been paid out.

8. Read the following headline and choose the condition that correspond with the business cycle.The unemployment rate is at 3.4%, a new 15 year low.

Correct Answer: A) Peak.

9. If the unemployment rate goes down, what will most likely happen to real GDP?

Correct Answer: A) Goes up.

10. This type of inflation occurs when an increase in the in production costs are passed on to the consumer.

Correct Answer: B) Cost Push Inflation.

11. In 2018, how much did the U.S. produce in final goods and services (GDP)

Correct Answer: C) 18.5 trillion dollars.

12. What is the definition for GDP?

Correct Answer: A) The market value of all final goods and services produced in a nation during a period of time, usually a year.

13. During recessions all of the following usually happen EXCEPT

Correct Answer: C) Inflation increases.

14. Nicole was laid off as a waitress when her restaurant closed down due to the slow economy. Nicole is considered

Correct Answer: A) Cyclically unemployed.

15. The Business Cycle measures ..... over time.

Correct Answer: C) Economic growth.

16. A nation seeking to increase its overall productivity might be best served by investing money into which area?

Correct Answer: D) Technology.

17. What is the formula for GDP?

Correct Answer: A) C + I + G + (X-M).

18. Unemployment caused when a person resigns from their job to start looking for a higher paying job that better suits their skills.

Correct Answer: C) Frictional.

19. When individuals lose jobs due to a decline in the economy (aggregate demand), often during an economic recession.

Correct Answer: B) Cyclical Unemployment.

20. It is important to control the strength of expansions because

Correct Answer: D) It is important to keep inflation from getting too high.