FP I - Unit 5 Test Review

Which is an economic condition that consumer spending usually measures?

• competition

• depreciation

• employment

• infrastructure

When interest rates continue to increase to a high level, the economy might experience a/an:

• expansion

• liability

• recession

• shortage

Which is a factor that measures the condition of the economy?

• fiscal policy

• profit margin

• price stability

• financial cycle

Businesses purchasing items for resale are exempt from sales tax. This helps to prevent what problem when measuring the GDP?

• recording bartering 

  underground

• double counting 

• economy 

• secondhand transactions

One factor that contributed to financial globalization was the shift of many developed countries from:

• floating exchange rates to fixed exchange rates

• fixed exchange rates to floating exchange rates

• declining exchange rates to pegged exchange rates

• pegged exchange rates to declining exchange rates

One factor that has stimulated financial globalization is the increase in:

• protectionism

• foreign regulation

• domestic competition

• investment preferences

The period of time during the business cycle when production and employment increase is called a/an:

• contraction

• expansion

• peak

• trough

When the Consumer Price Index (CPI) increases sharply, stock prices usually:

• fall

• rise

• stay the same

• fluctuate daily

What do bond yields typically do during an economic expansion?

• increase

• drop to near zero

• gradually decrease

• remain unchanged

Ups and downs in the level of economic activity over a period of time are called a/an:

• business cycle

• inventory level

• economic growth

• economic system