Chapter 2 Economic Indicators & Business Cycle

When the economy experiences an expansion, it is most likely the case that

• GDP is increasing, unemployment is increasing, and inflation is decreasing

• GDP is decreasing, unemployment is decreasing, and inflation is increasing.

• GDP is increasing, unemployment is decreasing, and inflation is increasing

• GDP is decreasing, unemployment is decreasing, and inflation is decreasing.

During recessions all of the following usually happen EXCEPT

• inflation decreases

• unemployment increases

• GDP decreases

• GDP increases

GDP is an important economic measurement because it

• provides valuable data on unemployment rates.

• provides valuable data on inflation rates.

• measures the value of final goods and services produced by a country.

• measures only the exports of a country

When calculating GDP, which of the following gets subtracted out?

• Consumer spending

• Business investment spending

• Imports

• Government spending

If GDP falls for at least 2 Quarters, it is considered what stage of the business cycle?

• Expansion

• Recession

• Prosperity

• Recovery

What term is used to describe the percent of the labor force that does not have a job but is currently looking for one?

• Leading economic indicator

• Full employment

• Unemployment rate

• workforce

What term is used to describe an increase in the general price level?

• Deflation

• Monetary policy

• Stagnation

• Inflation

Which term describes the phases of expansion and contraction in an economy over time?

• Recessions

• Prosperity

• Total product oscillations

• Business cycles

Which would most likely occur during a period of recession?

• Real gross domestic output falls

• Unemployment rate falls

• Production increase

• Personal income increases

Which of the following is associated with peaks in the business cycle?

• Relatively high levels of unemployment

• Relatively low levels of unemployment

• Recessions

• Both High Unemployment and Recession