Business Cycle Quiz

What does the business cycle depict?

• The fluctuation of employment rates over time

• The rise and fall in output (production of goods and services) over time

• The change in consumer preferences over time

• The variation of stock market prices

How many phases are there in a business cycle?

• Two

• Three

• Four

• Five

Which of the following is NOT a phase of the business cycle?

• Expansion

• Peak

• Contraction

• Stability

What is the phase of the business cycle that follows the peak?

• Expansion

• Contraction

• Trough

• Recovery

During which phase of the business cycle is output at its lowest?

• Expansion

• Peak

• Contraction

• Trough

What is an economic expansion associated with?

• Decrease in production/output

• Increase in unemployment

• Increase in wages

• Decrease in consumer spending

What is the upswing of the business cycle towards a peak called?

• Economic depression

• Economic expansion

• Economic contraction

• Economic stagnation

During an economic expansion, what happens to consumer spending?

• It remains constant

• It decreases significantly

• It increases

• There is no clear pattern

What typically happens to unemployment during an economic expansion?

• It increases

• It fluctuates unpredictably

• It remains the same

• It decreases

What generally happens to businesses as the economy expands?

• They see a decrease in sales or demand for their products.

• They produce fewer goods and services.

• They see an increase in sales or demand for their products.

• They do not change their production levels.