2Business Cycle #1 A steady, long-term increase in real GDP is economic growth.a depression.a peak.a recession.
3Business Cycle #2A period of economic growth as measured by a rise in real GDP is a(n)A. business cycle.B. peak.C. contraction.D. expansion
4Business Cycle #3A prolonged economic contraction that is not especially long or severe is referred to as a A. depression. B. recession. C. stagflation. D. trough.
5Business Cycle #4What is a business cycle? A. a period of increased economic growth B. a period of economic growth followed by economic contraction C. the amount of time it takes a business to produce its products D. a dangerous time for all businesses
6Business Cycle # 5 What is a recession? A period when real GDP falls for at least 6 monthA long a severe depressionA mild and short expansion
7Business Cycle #6The stage in a business cycle when real GDP stops falling is A. expansion. B. the peak. C. contraction. D. the trough.
8GDP Review # 1GDP expressed in constant, or unchanging, prices is referred to as A. real GDP. B. nominal GDP. C. aggregate supply. D. aggregate demand.
9GDP Review #2The total amount of goods and services in the economy available at all possible price levels is the A. gross national product. B. gross domestic product. C. aggregate demand. D. aggregate supply.
10GDP # 3Suppose an economy's entire output is automobiles. In Year 1, the country's real GDP is $300,000 and all manufacturers in the economy produce cars at $15,000 each. In Year 2, all manufacturers produce cars at $16,000 each. What is the real GDP in Year 2, if 20 cars are produced? A. $300,000 B. $320,000 C. $20,000 D. $280,000
11GDP #4 Goods used in the production of final goods are Durable goods Nondurable goodsIntermediate goodsFinal goods
12GDP # 5Which of the following is included in GDP? A. an intermediate good B. a service produced and used in another country C. a fish that you catch and eat yourself D. a fish that you buy at the market or store
13Inflation #1 Inflation that is out of control is referred to as HyperinflationDeflationWage price spiralCost push inflation
14Inflation #2If Julia invested $3,000 at an annual interest rate of 5% and from last year to this year there has been a 4% inflation rate, then, after a year the purchasing power of her investment A. rose by 1%. B. fell by 1%. C. is 4%. D. is 5%.
15Inflation #3The measurement that shows how the average price of a standard group of goods changes over time is theMarket basketInflation ratePrice indexCore inflation rate
16Inflation #4The theory that inflation occurs when producers raise prices in order to meet increased costs is theDemand pull theoryCost push theoryQuantity theoryWage price spiral
17Inflation #5 Inflation reduces purchasing power because The same amount of money buys more goods and servicesThe same amount of money buys fewer goods and servicesThe market basket has to be changed every yearThere is not enough money in the economy
18Inflation #6 The inflation rate is The ability to buy goods or servicesMeasured in fixed dollarsNot an important measure to economistsThe percentage change in price over time
19Putting it Together #1Business investment, interest rates and credit, consumer expectations, and external shocks are the four main factors that affectThe business cycleGross national productGross domestic productInflation
20Putting it Together #2What is the BEST measure of a nation’s standard of living?Real GDP per capitaPopulation growthSavingsNominal GDP per capita
21Putting it Together #3During the Contraction Phase of the Business Cycle, GDPIs risingStops risingIs always fallingIs not changing
22Putting it Together #4The stage of the business cycle where GDP stops falling isExpansionThe peakContractionThe trough
23Putting it Together #5Typically, when unemployment falls to very low levelsInflation is unchangedInflation increasesA period of deflation followsThe purchasing power of a dollar increases
24Putting it Together #6 Which statement best describes full employment? Everybody who wants a job has a jobThere is no unemployment at allThere is no cyclical unemploymentThere is no structural unemployment
25Unemployment #1Unemployment that occurs as a result of harvest scheduled or vacations, or when industries slow or shut down during a certain part of the year is calledFrictionalSeasonalStructuralcyclical
26Unemployment #2A technician specializing in the repair of video cassette players lost her job several years ago when then DVD player became more affordable for consumers. This is a case ofFrictional unemploymentSeasonal unemploymentStructural unemploymentCyclical unemployment
27Unemployment #3Unemployment that occurs when people take time to find jobs is calledFrictionalSeasonalStructuralcyclical
28Unemployment #4What will most likely still occur when the economy has achieved full employment?frictional, seasonal, and cyclical unemploymentSeasonal, structural, and cyclical unemploymentFrictional, seasonal, and structural unemploymentNone of the above are correct
29Unemployment #5If there were a recent downturn in the economy and some economists predicted a recession in the near future, then there is a strong possibility that there will be aRise in frictional unemploymentFall in structural unemploymentRise in structural unemploymentRise in cyclical unemployment
30Unemployment #6 Discouraged workers are Not counted in unemployment rateCounted in the unemployment rateIncluded in the calculation of the labor forceConsidered unemployed
31USA Test Prep #1Which of these is an economic indicator used to tell how an economy is doing?Equilibrium priceConsumer price indexJob satisfaction ratePresidential approval rate
32USA Test Prep #2Which of these will have an effect on the GDP of the country?Monty buys a Picasso paintingLisa loses $20.00 in a bet with BartNed fixes Jay’s car without buying any new partsThe Shelbyville Whoopee Cushion company makes 1,000 to export to China
33USA Test Prep #3The US Government has decided to issue federal income tax rebates to taxpayers. What is MOST LIKELY the goal of these rebates?Increase consumer spendingIncreased transfer paymentsReduction in the employment rateReduction in military budget
34USA Test Prep #4The Consumer Price Index (CPI) is best used to determineThe Dow Jones IndexThe rate of inflationThe unemployment rateReduction in the military budget
35USA Test Prep #5Ned is a typewriter repairman. As typewriters are being replaced by computers Ned finds less and less work. What type of unemployment is Ned experiencing?SeasonalCyclicalFrictionalStructural
36USA Test Prep #6Over a three year period, the US experienced an increase in the Real GDP, low Inflation, and declining unemployment rate. For this period, the USWas in an economic troughWas in a stagnant economic periodAppeared to be entering a recessionWas in the middle of an economic boom