Economic Challenges

What is a recession?

• increase in GDP
• decrease in GDP
• decrease in GDP for 6 months+
• GDP stays same for 1 year

What is it called when GDP is decreasing?

• expansion
• trough
• peak
• contraction

What is true about business cycles?

• they are a thing of the past
• they occur every 10 years
• unpredictable, irregular
• do not happen in US

What is a depression?

• when GDP crosses trend line
• when gdp is decreasing
• at a peak on cycle
• a prolonged recession

What is true of business cycles?

• they are regular in communist economies
• they are measured from peak to peak
• they are regular and occur frequently
• they are a thing of the past

Unemployment decreases to 3%.

• Expansion

• Contraction

Unemployment increases to 10%.

• Expansion

• Contraction

A period of falling output that lasts longer than 6 months (2 quarters).

• Recession

• Depression

• Macroeconomics

• Microeconomics

Which of the following would NOT be included in GDP?

• Business investments

• Government spending on new goods

• New Goods

• Monetary transfers

Which letter represents the Contractionary (Recession) Phase?

• A

• B

• C

• D