ECON - Unit 4 Practice Test

Front

Point #1 on the graph indicates a __________ of the business cycle.

Back

Peak

Front

Point #2 on the graph indicates a __________ of the business cycle.

Back

Contraction

Front

Point #4 on the graph indicates a __________ of the business cycle.

Back

Expansion

Front

Gross Domestic Product is a method for calculating how much a country produces by adding which four spending categories?

Back

Consumption, Investment, Government, Net Exports

Front

What is a market basket generally used for?

Back

compare prices of goods between years to calculate the consumer price index.

Front

The best definition of inflation is:

Back

A rise in the price level

Front

Generally speaking, inflation is beneficial to ________ and harmful to _________.

Back

borrowers; lenders

Front

Comparing real GDP between two consecutive years is MOST useful in determining which economic measurement?

Back

Economic growth

Front

Fiscal policy refers to the power of the federal government to

Back

Tax and spend

Front

Due to a global economic downturn, individuals are deciding to hold onto their money and delay major purchases. What is the immediate impact on aggregate demand and price level?

Back

Aggregate demand will decrease, lowering both real GDP and the price level.