Economics Test 12-14

Réussis tes devoirs et examens dès maintenant avec Quizwiz!

Which year shows a trough in the business cycle?

2009

Consumption + Investment + Government + Net Exports = ?

Gross Domestic Product

Based on this information, which change occurred between Year 1 and Year 2?

Inflation increased.

How does a high unemployment rate sustained over a long period of time affect the economy?

It leads to a decrease in the amount of currency circulating in the economy.

How would the flows in this diagram most likely be affected by higher personal income tax rates?

Line 3 would decrease.

How would this diagram most likely be affected by taxes that are taken out of workers' wages and given to the government?

Money available to businesses would decrease.

Which stage of the business cycle has the highest inflation rate?

Peak

Which phrase best explains the difference between nominal and real Gross Domestic Product (GDP)?

Real GDP is adjusted for inflation.

A country's unemployment rate increased to 9.3%. Inflation grew at an average of just 0.2%. Where is this country in the business cycle?

Recession

The U.S. Department of Defense purchases a new fighter plane. Which statement best describes how the circular economic flow will be affected by this action?

Revenue for businesses will increase.

Which statement describes the relationship between the consumer price index (CPI) and the business cycle?

The CPI decreases during periods of contraction.

How is the standard of living affected when inflation occurs rapidly?

The standard of living declines because wages fail to keep up with rising prices.

Use the information to answer the question. According to the Bureau of Labor Statistics, unemployment in the United States rose steadily from a low of 4.4% in March 2007 to a peak of 10.2% in October 2009. Which statement best supports this information?

The trend indicated that the country was experiencing a period of economic recession.

Which stage of the business cycle describes the period when the real gross domestic product (GDP) stops falling?

Trough

Which economic indicator best shows that deflation is occurring?

a decline in prices due to the lack of consumer spending

Which statement best defines deflation?

a persistent fall in the general price level of goods and services

Which government action would most likely increase the flow of money from households to businesses?

a reduction of personal income tax

Which option best matches a gross domestic product (GDP) trend with a stage in the business cycle?

accelerating GDP growth - period of expansion

If the U.S. economy has been in recession for ten months, how can the Federal Reserve most quickly expand the money supply?

by purchasing government bonds

How are the real prices of these items determined?

by using the consumer price index for 1962

Which term is defined as unemployment that occurs during a recession?

cyclical

What is the most likely cause of the change in the CPI between 2008 and 2009?

decrease in inflation

Which action by the government is an expansionary monetary policy?

decreasing the reserve requirement

Use the excerpt below to answer the question. Real gross domestic product—the output of goods and services produced by labor and property located in the United States—increased at an annual rate of 3.1 percent in the third quarter of 2012. . . . In the second quarter, real GDP increased 1.3 percent. —Bureau of Economic Analysis, "National Income and Product Accounts," 2012 Which part of the business cycle is described by this excerpt?

expansion

What does the information on this graph show?

fluctuations of a nation's economy

What is the most likely result of adopting polices to achieve full employment?

increase in inflation rates

If the Federal Reserve chooses to buy bonds, which additional action by the Federal Reserve would be consistent with this strategy?

increasing the discount rate

Nominal prices, sometimes called current dollar prices, measure the dollar value of a product at the time it was produced. Real prices are adjusted for general price-level changes over time. Based on this information, which economic measure is best applied to determine real prices?

inflation

What is one factor that led to the trend shown in this table?

participation in a global economy

Inflation would benefit which group of people the most?

people who are in debt

Which measurement best indicates the economic growth of a country?

per capita Real Gross Domestic Product

This scenario describes which part of the business cycle?

recession

Which term completes the list? The Five Stages of ? 1. Growth 2. Peak 3. Recession 4. Trough 5. Recovery

the Business Cycle

Which economic indicator will be affected by a change in long-term interest rates?

the number of new homes purchased by consumers

What is one characteristic of a period of recession?

unemployment tends to rise


Ensembles d'études connexes

Finance Chapter 2 LearnSmart Questions

View Set

Hand, Wrist, Finger, Thumb Positioning SFMC

View Set

AP US History Chapter 22 Study Guide

View Set

Cerebral Cortex Functions and Lesions

View Set