Economic Indicators and the Business Cycle

Match the economic goal with the tool used to measure it.

• Gross Domestic Product

• Full Employment

• Unemployment Rate

• Price Stability

• CPI and Inflation

• Growth

Reorder the following parts of the business cycle into the correct order. (Start with a trough.)

• Trough

• Contraction

• Expansion

• Peak

At this part of the business cycle, which economic indicator is most concerning to policymakers?

• Unemployment Rate

• Inflation

• Gross Domestic Product

Match the following

• Unemployment is falling

• 
• inflation is climbing

• 
• Unemployment is highest

• 

In what year did the world produce the most goods and services?

During the contraction phase of the business cycle, what happens to the amount of goods and services produced?

• goes up

• goes down

During the contraction phase of the business cycle, what happens to the number of workers needed by producers?

• increases

• decreases

• stays the same

• nothing

What will people looking for work during the contraction phase of the business cycle find?

• Business are hiring a large number of workers.

• It is easy to find work.

• They will find jobs plentiful.

• It is more difficult to find work.

Answer explanation

Do firms need as many workers when producing less goods and services?

Which of the following is true at the peak of a business cycle?

• Production is high, unemployment is high, price levels are high

• Production is low, unemployment is low, price levels are low

• Production is high, unemployment is low, price levels are high

• Production is low, unemployment is high, price levels are low

Why do prices tend to rise during the recovery phase of a business cycle?

• Buyers have increased income and demand more goods and services.

• Buyers have decreased income and demand fewer goods and services.

• Sellers have increased revenues and supply more goods and services.

• Sellers have decreased revenues and supply fewer goods and services.

Answer explanation

What happens to production during recovery?