Business Cycles Quiz 15 (20 MCQs)

Quiz Instructions

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1. In the post-maturity stage, they business may head in one of three directions

Correct Answer: D) Steady state, decline, renewal.

2. When inflation is high the ..... of the dollar decreases

Correct Answer: B) Purchasing power.

3. GDP declines during a(an)

Correct Answer: B) Contraction.

4. Which stage is often referred to as the riskiest stage of the life cycle?

Correct Answer: B) Startup.

5. ..... sector has seen the most convincing patterns of outperformance in the late cycle.

Correct Answer: B) Energy.

6. Sum of the employed and the unemployed

Correct Answer: C) Labor Force.

7. Business Cycle is defined as:

Correct Answer: B) Movement of the economy from one condition to another and back again.

8. Growing inventory and decreasing sales growth is indicative of a country in the ..... stage of the business cycle.

Correct Answer: C) Late.

9. To calculate GDP, the government adds up

Correct Answer: D) All of the above.

10. The performance of which other goal(s) can be inferred from the business cycle?

Correct Answer: C) Both full employment & price stability.

11. Which of the following is not a stage of the business cycle?

Correct Answer: C) Decline.

12. "Real" GDP more accurately measures changes in production than Nominal GDP because it accounts for .....

Correct Answer: A) Changes in price.

13. If GDP of the economy grows, what is MOST LIKELY to happen to sales and profitability of a business in the economy?

Correct Answer: A) Increase.

14. In which of the following categories does a recession NOT cause a decline?

Correct Answer: C) Tax Rate.

15. Individuals are unemployed due to a lack in skills that modern industries need, change in technology.

Correct Answer: C) Structural Unemployment.

16. Unemployment Rate =

Correct Answer: B) # of unemployed / # in the civilian labor force X 100.

17. What is the definition for inflation?

Correct Answer: B) The increase of general prices over time.

18. Because the business cycle directly measures growth over a period of time, what should the y-axis be labeled?

Correct Answer: C) Real GDP.

19. In which phase would firms start to lay off workers

Correct Answer: C) Recession.

20. Which of the following is a cause of a trough?

Correct Answer: D) A severely outdated product.