IGCSE Business Studies - Ch 27 The business cycle

What are the 4 stages of the business cycle?

• Growth, expansion, inflation, contraction
• The top, the right, the bottom, the left
• Expansion, recession, growth, contraction
• Growth, boom, recession slump

Which 2 of the following are correct about business cycle...

• shows the rise and fall of production output of goods and services

• Is measured by GDP (gross domestic product)

• Is not a good indicator or inflation

• Is a lagging indicator

GDP Stands For

• Greatest Domestic Product
• Gross Domestic Product
• Gross Domestic Produce
• Greatest Domestic Produce

What is GDP?

• The value of a specific good & service in a country
• The value of goods and services produced in a country in one year
• The value of all goods and arrived in the whole world
• All goods made by a country outide the border of a country

GDP is rising during 'Growth' stage.

• True
• False

The followings are the characteristics of 'growth' period, except for:

• Existing businesses grow and make more profit
• Generally falling unemployment within the country
• Low living standards
• A positive outlook for new businesses

What is a characteristics of boom period?

• Business investments and profits are at their highest levels
• Businesses may make people redundant to cut costs
• Some businesses may have to close down
• Unemployment can reach very high levels due to low business activity

The followings occur during slump period, except for:

• Very low business confidence leading to very little investment
• Low demand for goods and services
• Low unemployment leading to a shortage of skilled workers
• Unemployment can reach very high levels due to low business activity

GDP is at its lowest during slump period.

• True
• False

Unemployment usually decreases during an economic boom period

• True
• False