Principles of Business 9e Chapter 2 Economic Activity

A number that compares prices in one year with some earlier base year

• Price Index

• Retail Sales

• Personal Income

• Productivity

A financial situation that occurs when a government spends less than it takes in

• Budget surplus

• Capital projects

• Retail Sales

• Budget Deficit

The phase of the business cycle in which demand begins to decrease, businesses lower production, unemployment begins to rise, and GDP growth slows for two or more quarters of the calendar year.

• Prosperity

• Recovery

• Depression

• Recession

The phase in the business cycle in which unemployment rates begin to decrease, demand for goods and services increases and GDP begins to rise again.

• Prosperity

• Depression

• Recovery

• Recession

A certificate representing a promise to pay a definite amount of money at a stated interest rate on a specified due date.

• Price Index

• Bond

• Recovery

• Stock

The total value of all final goods and services produced in a country during one year is Gross Domestic Product (GDP)

• True

• False

Spending by businesses for items such as land, buildings, equipment, and new products is known as Capital Projects

• True

• False

The definition of Unemployment Rate is the portion of people in the labor force who are not working

• True

• False

The total amount owed by the federal government is called National Debt

• True

• False

Prosperity means that the peak of the business cycle, is a period in which most people who want to work are working, businesses produce goods and services in record numbers, wages are good and the rate of GDP growth increases.

• True

• False