Business Management 2.04

1. If interest rates go down, which would most likely occur?

• U.S. exports will decrease
• The stock market will go up

How does double counting affect the gross domestic product

• It inflates the GDP
• It decreases the GDP

Unemployment hurts the economy because unemployed people are unable to contribute to the:

• standard of living
• gross domestic product

An economy with a high unemployment level tends to have

• a lower rate of inflation
• rapid GDP growth

How long do most business cycles last

• Varying lengths of time
• At least 10 years

Your chances of finding and maintaining a job are greatest during the business cycle phase known as:

• expansion.
• contraction.

In the calculation of GDP, which component is subtracted

• Gross private investments
• Imports

When interest rates continue to increase to a high level, the economy might experience a/an:

• recession
• expansion.

What often happens when a nation has a high unemployment rate?

• The nation experiences an economic slowdown
• The stock market remains unaffected

Increased consumer spending indicates that the economy is stable and growing because increased spending leads to an increase in:

• scarcity of resources
• demand for products