3.2 Economic Measures and the Business Cycle

The lowest point of output in a recession, before a recovery begins is called

• trade deficit
• depression
• trough
• recovery

When a recession is predicted in an economy which of the following occurs?

• businesses decrease investment
• consumers increase spending
• businesses increasing hiring
• businesses increase investment

Which letter represents the Contractionary (Recession) Phase?

• A
• B
• C
• D

Where on the business cycle would you find the highest unemployment?

• A
• B
• C
• D

What can the government do to give a boost to a slowing economy? 

• raise taxes
• lower taxes
• increase interest rates

If unemployment is high, how will the economy be affected?

• Government spending will decrease
• Consumer spending will decrease
• Consumer spending will increase
• Business investments will increase

recurring periods of expanding and contracting economic activity

• Gross Domestic Product
• Business cycle
• National Income Accounting
• Microeconomics

Which phase of the Business Cycle includes the economy slowing down?

• Expansion
• Recession
• Depression
• Recovery

Low unemployment, an increase in the output of goods and services, and increasing consumer spending best illustrates which of the following periods of the business cycle?

• expansion
• recession
• trough
• peak

GDP is the highest in which of the following phases?

• Trough
• Expansion
• Peak
• Recession