Unit 4—Business Cycles

Review made by students.

Growth lessens the burden of

A. Scarcity B. The recession C. Inflation D. The government

What was the unemployment rate during the Great Depression?

A. 70% B. 5% C. 25% D. 50%

Which of the following is not a cause of inflation?

A. Demand-pull B. Supply-side C. Cost-push D. Stock-buy

How long would it take for prices to double if the inflation rate is 7%?

A. 7 years B. 6 years C. 10 years D. 20 years

Discouraged workers are not

A. Necessarily seeking work B. Correctly seeking work C. Actively seeking work D. Willingly seeking work

Growth of a nation is important because

A. It means more material will be in abundance

B. It sets a standard for other nations to strive for

C. It lessens the scarcity burden D. Both A and C

What are the types of unemployment?

A. Seasonal, cyclical, detrimental and beneficial.

B. Real and estimated C. Seasonal, cyclical, structural and

frictional D. There are no types of

unemployment. There is just inflation.

The discouraged

A. Understate the unemployment rate

B. Overstate the unemployment rate C. Are counted as officially

unemployed D. Are structurally unemployed

Which of these is not a cause of inflation?

A. Too much money chasing too few goods.

B. Not enough supply of goods and services.

C. Too many people being employed. D. None of these

The peak in the business cycle is

A. The point where output starts to decline.

B. When business activity reaches a temporary max.

C. The beginning of a recession. D. All of the above.

Jerry works as Santa in the mall every winter. The is an example of

A. Frictional unemployment B. Structural unemployment C. Seasonal unemployment D. Cyclical unemployment

Which word best describes the lowest point of a recession?

A. Peak B. Trough C. Median D. High point

Wage inflation is caused by

A. Too many unions B. Too many employed C. Too many politicians D. Too few producers

What is the Rule of 70?

A. Approximate number of years to double the rGDP.

B. A rule that states rGDP is always 70.

C. A rule that has nothing to do with economics.

D. None of the above.

All of the following are unequal burdens (of unemployment) except:

A. Occupation B. Age C. Race D. Inflation

The natural rate of unemployment can be found by adding:

A. Cyclical and structural B. Structural and seasonal C. Frictional and cyclical D. Structural and frictional

You have just graduated from college and are looking for your first real job. What type of unemployment?

A. Cyclical B. Seasonal C. Frictional D. Structural

When the country goes in the recessionary phase

A. Output and income increase B. Output and income level out C. Must be a decrease in rGDP for

two cycles D. As contraction continues,

inflationary pressures increase

If the NRU is 4% and actual unemployment is 8%, what is the GDP gap?

A. 4% B. 8% C. 16% D. 32%

A general rising of the level of prices

A. Deflation B. Recession C. Inflation D. Accumulation

The rate of growth record shows that rGDP has grown ? per year since 1950 and per capita ? per year.

A. 5% and 6% B. 2% and 3.1% C. 4.2% and 1.9% D. 3.1% and 2%

During a recession

A. Inflationary pressure subsides B. Output increases towards full

employment C. Inflation accelerates D. There is aggregate spending

Political cuts in supply could cause

A. Output to rise B. Employment to rise C. Unemployment to rise D. Output and employment to decline

The business cycles graph includes

A. Peak B. Inflation point C. Crest D. # of waves

The rule of 70

A. Works for the doubling time of anything

B. Doesn’t exist C. Shows the percentage of national

bankruptcy D. Doesn’t apply to inflation

When output increases towards full employment

A. Expansionary / recovery B. Expansionary / recession C. Expository / recovery D. Expository / recession

A secretary who only knows how to use a typewriter is unemployed. What type of unemployment is it?

A. Frictional B. Seasonal C. Structural D. Cyclical

What is one of the main sources of growth?

A. Gov’t threatens a tax if a company does not reach a productivity level.

B. A company increases their productivity of existing inputs.

C. Gov’t brings prices down so consumers will spend more of their money.

D. A company starts underground selling.

Economically, a peak is

A. Top of the mountain B. Where business reaches a

maximum C. Point at which output declines D. Both B and C

A DEEP trough is

A. A recession B. A “bump in the road” C. Cyclical fluctuation D. A depression

How long does a recession typically last?

A. 5 to 6 years B. 12 to 18 months C. 6 to 12 weeks D. 18 to 25 months

Which TWO races are usually affected by unemployment the most?

A. Hispanic B. White C. Black D. Asian

Too much money chasing too few goods

A. Cost-push B. Supply-side C. Demand-pull D. Cyclical fluctuations

Unemployment/labor force X 100

A. Inflation rate B. Full efficiency C. Unemployment rate D. rGDP

Growth is based on

A. Increase in nGDP B. Increase in nGDP per capita C. Increase in rGDP per capita D. China’s lead based paint

A business cycle is measured from

A. Peak to trough B. Trough to trough C. Peak to recession D. Peak to peak

What decreases more during a recession?

A. Durable goods B. Nondurable goods C. Both D. None of the above

Okun’s law measures the difference between

A. rGDP and nGDP B. Actual GDP and potential GDP C. GDP and NDP D. Negative GDP and positive GDP