Business Cycle and GDP

The Lowest point in the business cycle

• Peak
• Trough
• Expansion
• Contraction

The HIGHEST Point in business cycle

• Peak
• Trough
• Contraction
• Recession

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

• Deflation
• Monetary policy
• Stagnation
• Inflation

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

• Prosperity
• Recession
• Depression
• Recovery

What is demand pull inflation?

• rise in price due to a decrease in supply
• a rise in price level due to an increase in demand
• a decrease in price due to an increase in supply
• a decrease in price due to a decrease in supply

A situation of rising prices resulting from increases in the cost of production.

• Deflation
• Cost-push Inflation
• Demand-pull inflation
• Consumer Price Index

Expectant parents buy supplies for the nursery.  Would this be included in GDP? 

• Yes - Consumer Spending
• Yes - Investment 
• No - Intermediate goods
• No - Non-market activity

The federal government is expected to spend $3.95 trillion this year.  Will this be counted in GDP?

• YES
• NO

The value of the output of all final goods and services produced within a country in a year.

• total ouput
• Gross Domestic Product
• national income
• net domestic product

GDP is calculated by

• adding up the cost of goods used in producing the item
• subtracting all costs from total revenue
• adding consumption + investment +government spending+ (exports sold - imports bought)