Inflation, Unemployment, & The Business Cycle

Inflation can best be defined as...

• A general increase in prices.

• An increase in prices of key items purchased by consumers.

• The increase in the value of fiat money

• The printing of too much paper money.

Inflation is most likely to occur during which phase of the business cycle

• Expansion

• Contraction

Who does Inflation hurt?

• People with a fixed income

• Savers

• Money Lenders at fixed interest rates

• All of the above

Who among the following would be considered as unemployed?

• A college student of legal age to work but who is still in school full time.

• An entrepreneur in the process of starting a new business.

• A secretary who was laid-off from work & is looking at job ads

• A housewife taking care of three children.

_______ occurs when people are in between jobs, entering and reentering the labour force.

• Cyclical unemployment

• Technological unemployment

• Frictional unemployment

• Seasonal unemployment

Farm helpers are unemployed when the cropping season is over.

• frictional

• cyclical

• structural

• seasonal

When individuals lose jobs due to a decline in the economy during an economic recession.

• Structural Unemployment

• Cyclical Unemployment

• Frictional Unemployment

• Seasonal Unemployment

Individuals are unemployed due to a lack in skills that modern industries need.

• Cyclical Unemployment

• Frictional Unemployment

• Structural Unemployment

• Seasonal Unemployment

The business cycle is made up of how many phases?

• 5

• 4

• 3

• 2

Economic recovery begins-

• above the trend line

• at the end of a recession (trough)

• at the "boom" period