Economic Growth & The business Cycle

What does the business cycle in market economies like Australia refer to?

• Changes in the government's fiscal policies over time

• Fluctuations in the level of real GDP over time

• The cycle of business start-ups and closures

• The pattern of stock market prices over time

How is one complete business cycle measured?

• From trough to peak

• From peak to peak or trough to trough

• From recovery to downswing

• From the start of a fiscal year to the end

On average, how long is one business cycle in Australia estimated to be?

• 3 years

• 5 years

• 7 years

• 10 years

 During which phase of the business cycle is unemployment at its highest in Australia?

• Trough

• Recovery

• Peak

• Downswing

Which phase of the business cycle is characterized by the economy expanding towards full employment?

• Trough

• Recovery

• Peak

• Downswing

During which year did Australia experience a recession with a forecasted growth of -2.4% due to the COVID-19 pandemic?

• 2008-09

• 2010-11

• 2020

• 2022-23

What defines a recession in economic terms?

• One quarter of negative economic growth

• Two consecutive quarters of negative economic growth

• An increase in the unemployment rate

• A decrease in the CPI

What government policy is used to 'smooth out' fluctuations in the business cycle?

• Counter cyclical or stabilisation policies

• Progressive taxation

• Deregulation

• Trade liberalization

 During a peak of the business cycle, what kind of policies might the government use?

• Expansionary monetary and fiscal policies

• Contractionary monetary and fiscal policies

• Neutral policies

• Deregulation policies

What was the unemployment rate in Australia during the 1990-91 recession?

• 4%

• 7.8%

• 11%

• 6.2%