Topic 2.6 Supporting Economic Growth

Why do government experts track the business cycle?

• to provide a record of what has gone wrong in the past

• to try to predict what will happen to the U.S. economy

• to help maintain competitive balance between businesses

• to give the government a competitive advantage over businesses

Which of these might indicate that the national economy is stable?

• Prices for groceries and other daily needs go down from year to year.

• Prices for groceries and other daily needs stay about the same from year to year.

• Prices for groceries and other daily needs go up from year to year.

• Prices for groceries and other daily needs are tightly regulated.

How does improved technology allow the economy to operate more efficiently?

• It enables people to work fewer hours.

• It ensures that all of the nation’s resources will be used.

• It ensures that all of the nation’s workers are employed.

• It helps to make better use of the nation’s limited resources.

What economic measurement helps to monitor the business cycle?

• gross domestic policies

• guaranteed domestic product

• guaranteed domestic policies

• gross domestic product

Why would a federal government decision to increase spending be a matter of macroeconomic policy?

• Macroeconomics concerns the overall performance of the government.

• Macroeconomics concerns the overall performance of the economy.

• Macroeconomics concerns the performance of households.

• Macroeconomics concerns the performance of small businesses.

How is gross domestic product used to monitor the business cycle?

• GDP indicates whether a business is expanding or contracting.

• GDP indicates whether a city's economy is expanding or contracting.

• GDP indicates whether the nation's economy is expanding or contracting.

• GDP indicates whether the world's economy is expanding or contracting.

How do patents act as an incentive to technological innovation?

• by protecting a patent holder's right to profit from his or her creativity

• by protecting the government's right to patent creative works

• by protecting a business's right to profit from someone else's creativity

• by protecting unpatented creative works

If the economy were in the contracting phase of the business cycle, how might that affect your ability to find work?

• It might be easier to find work because businesses would be more likely to hire new employees.

• It might be easier to find work because businesses would have fewer workers to choose from.

• It might be more difficult to find work because businesses would be less likely to hire new employees.

• It would have no effect on finding work.

Suppose Congress passed a bill funding research into alternative sources of energy. What best describes this government action?

• seeking gains in knowledge about the national economy

• monitoring and regulating banks and other financial institutions

• promoting innovation and invention to help maintain technological advantage

• seeking to prevent sudden, drastic shifts in prices

The federal government can pursue economic policies such as spending or taxation to stimulate an economy that is contracting or to cool one that is expanding too rapidly. When the government acts to influence the economy in these ways, what is its goal?

• to maintain consumers' freedom of choice

• to support self-regulation in the marketplace

• to encourage economic citizenship

• to promote stability in the business cycle