Government 4.07 Module Exam

The inflation rate is decreasing and unemployment is rising. The economy is likely in

• contraction

• expansion

• a peak

• a trough

The inflation rate is increasing and unemployment is decreasing. The economy is likely in

• contraction

• expansion

• a peak

• a trough

Inflation is low but the unemployment rate is the highest seen in several years. Economists report signs that show in six months the economy is likely to improve. The economy is likely in

• contraction

• expansion

• a peak

• a trough

Which of the following circumstances usually comes before a period of economic contraction?

• Decreasing inflation

• High unemployment

• Low GDP

• Peak production

Which of the following circumstances usually accompanies a period of economic expansion?

• Falling production

• High inflation

• Low GDP

• Rising unemployment

In the business cycle, when is "deflation" most likely to occur?

• As GDP rises

• During a recession

• During expansion

• With low unemployment

Which is an example of a natural monopoly?

• A company that enters the market and requires new infrastructure

• A group of companies that own all the sources of production

• A milk product that is produced by multiple companies

• A single source for electricity in your community

Some products are produced most efficiently when there is a single supplier. What is this called?

• Natural monopoly

• Natural resources

• Price controls

• Wage controls

Who may regulate a natural monopoly?

• Consumers

• Corporations

• Government

• Suppliers

Which describes a benefit from government regulation of a natural monopoly?

• After flooding destroys homes in a small town, rent goes up.

• Livy's gas utility bill does not go up during a natural gas shortage.

• The corn syrup in Marcus's candy was cheaper to use than sugar.

• Two lumber suppliers compete to offer the best price for paper mills.