14 Economic Instability

What happens during a depression?

• Production rises, output increases, unemployment lowers, and the standard of living increases

• Production holds steady, output turns around, unemployment shrinks, and the standard of living drops

• Production speeds up, output holds steady, unemployment increases, and the standard of living doubles

• Production slows, output declines, unemployment rises, and the standard of living falls

On the average, what last longer, a recession or a recovery?

• recession

• recovery

• On average they last about the same time

• It depends on the depth of the gap

What are the two main phases of a business cycle?

• Peak & Trough

• Peak and Recession

• Recession and Expansion

• Expansion and Recovery

What was the most severe recession that the United States has ever seen?

• Panic of 1820

• The Great Depression 1930's

• The Great Inflation 1970's

• The Great Recession 2008

Which workers are not counted when figuring out the Unemployment rate? (select two answers)

• Anyone in the Armed Forces

• Those who work less than 40 hours a week

• Those who have given up looking for work

• Discouraged workers (they don't like their job)

What two kinds of unemployment are likely to affect construction workers?

• Frictional and Structural

• Cyclical and Seasonal

• Technological and Structural

• Frictional and Seasonal

What is Inflation?

• High unemployment

• Low production output

• A type of Pandemic

• A general rise in prices

What are the two main causes of inflation?

• Demand-push & Supply-pull

• Wage-freeze & Product-cost

• Cost-spiral & Bear-down

• Demand-pull & Cost-push

Who benefits from inflation?

• borrower

• lender

• producer

• worker

What do Economist use the CPI (Consumer Price Index) for?

• To chose stocks from

• to locate recessionary gap

• to realize an inflationary period

• to find the unemployment rate