This quiz works best with JavaScript enabled. Home > Macroeconomics > Cycles > Business Cycles – Quiz 8 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Business Cycles Quiz 8 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Low unemployment, an increase in the output of goods and services, and increasing consumer spending best illustrates which of the following periods of the business cycle? A) Expansion. B) Recession. C) Trough. D) Peak. Show Answer Correct Answer: A) Expansion. 2. The trade in exotic animals being illegally sold as pets is a multi-billion-dollar-a-year industry. Is this included in GDP? A) Yes-Consumer spending. B) Yes-Government Spending. C) No-Underground Economy. D) No-Non-market activity. Show Answer Correct Answer: C) No-Underground Economy. 3. Inflation Rate = A) CPI Current Year-CPI of Previous Year/CPI of Previous Year X 100. B) CPI of Base Year-CPI of Current Year/CPI of Current Year X 100. C) PPI / CPI X 100. D) PPI X CPI / 100. Show Answer Correct Answer: A) CPI Current Year-CPI of Previous Year/CPI of Previous Year X 100. 4. What type of Unemployment is represented here?Scenario:You are let go from Ritas because the Spring and Summer seasons have passed. A) Cyclical. B) Seasonal. C) Structural. D) Frictional. Show Answer Correct Answer: B) Seasonal. 5. When using the expenditure approach to calculate GDP, which of the following gets excluded? A) Consumer spending. B) Business investment spending. C) Imports. D) Government spending. Show Answer Correct Answer: C) Imports. 6. Read the following headline and choose the condition that correspond with the business cycle.Due to increased consumer spending, the Federal Reserve raises interest rates to slow the economy down. A) Peak. B) Contractionary. C) Trough. D) Growth. Show Answer Correct Answer: A) Peak. 7. In real business cycle models and new classical models A) Monetary factors are responsible for fluctuations in output and employment. B) Changes in unemployment are involuntary. C) Markets always clear. D) Prices and wages are perfectly flexible. Show Answer Correct Answer: D) Prices and wages are perfectly flexible. 8. Nick quits his job at Topps in order to find a better job. What type of unemployment is this? A) Cyclical. B) Frictional. C) Structural. D) None of above. Show Answer Correct Answer: B) Frictional. 9. What term is used to describe an increase in the general price level? A) Deflation. B) Monetary policy. C) Stagnation. D) Inflation. Show Answer Correct Answer: D) Inflation. 10. When an economy is in the contraction (recession) phase of the business cycle the government will likely A) Increase government spending to stimulate economic growth. B) Increase investment in training programs to assist unemployed people to find work. C) Both a & b. D) None of above. Show Answer Correct Answer: C) Both a & b. 11. CPI index for 2016 and 2017 was 125 and 120 respectively. Based on the information provided, between 2016 and 2017 A) Price increased by 4%. B) Price decreased by 4%. C) Price increased by 5%. D) Price decreased by 5%. Show Answer Correct Answer: B) Price decreased by 4%. 12. Caused by the increases in the expenses of production without the corresponding increase in output. A) Cost push inflation. B) Demand pull inflation. C) Divisional inflation. D) Structural inflation. Show Answer Correct Answer: B) Demand pull inflation. 13. A period of macroeconomic expansion or growth, followed by a period of contraction, or decline. A) Business Cycle. B) Circular Flow. C) Equilibrium. D) GDP. Show Answer Correct Answer: A) Business Cycle. 14. Which of the following is NOT a challenge of the growth stage? A) Overextending resources of the business in order to expand. B) New competitors. C) Cost-cutting. D) Deciding a re-positioning strategy. Show Answer Correct Answer: D) Deciding a re-positioning strategy. 15. When the unemployment rate is relatively high, A) The growth in real GDP is high. B) The growth in real GDP is low. C) Inflation is also relatively high. D) The amount of physical capital available has decreased. Show Answer Correct Answer: B) The growth in real GDP is low. 16. The federal government's overall approach to spending and taxes is called A) Physical Policy. B) Fiscal Policy. C) Money. D) Monetary Policy. Show Answer Correct Answer: B) Fiscal Policy. 17. Logan loses his job cooking pizza when a robot can do it faster and at a lower expense. Which type of unemployment is he experiencing? A) Cyclical. B) Structural. C) Frictional. D) Seasonal. Show Answer Correct Answer: B) Structural. 18. If GDP of the economy falls and decreases, what is MOST LIKELY to happen to production and recruitment at a business in the economy? A) Increase. B) Decrease. C) Stay the same. D) None of above. Show Answer Correct Answer: B) Decrease. 19. In which stage of the business life cycle could it be necessary to bring in external professions to help analyse, evaluate or review the business? A) Seed. B) Post-matuirty. C) Maturity. D) Growth. Show Answer Correct Answer: B) Post-matuirty. 20. One of the most effective ways for a business to stay competitive in the maturity stage is to? A) Lay off staff. B) Create more products. C) Cut costs. D) Open more business locations. Show Answer Correct Answer: C) Cut costs. ← PreviousNext →Related QuizzesMacroeconomics QuizzesBusiness Cycles Quiz 1Business Cycles Quiz 2Business Cycles Quiz 3Business Cycles Quiz 4Business Cycles Quiz 5Business Cycles Quiz 6Business Cycles Quiz 7Business Cycles Quiz 9Business Cycles Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books