3.7.5 Economic environment

What does GDP stand for?

• Gross Domestic Product

• Gross Domestic Profit

• General Domestic Product

• General Domestic Profit

Which of the following is NOT a component used to calculate GDP?

• Total consumer spending

• Business investment

• Government spending

• Total consumer savings

What does economic growth mean in terms of production?

• An increase in a nation's production of goods and services

• A decrease in a nation's production of goods and services

• A stabilization in a nation's production of goods and services

• A fluctuation in a nation's production of goods and services

Which factor is NOT mentioned as influencing the economic growth potential of an economy?

• Quantity and quality of labor

• Investment

• Government policies

• Climate change

What usually follows a period of rapid economic growth?

• Recession

• Boom

• Recovery

• Stagnation

During a boom, what happens to production and prices?

• Production increases, prices increase

• Production decreases, prices increase

• Production increases, prices decrease

• Production decreases, prices decrease

What is one way businesses can respond during a long boom?

• Invest in production facilities

• Lay off workers

• Decrease prices

• Close down operations

What is a common business strategy during a local recession?

• Market their goods elsewhere in the country

• Increase local marketing

• Raise prices

• Expand local operations

What is the general effect of economic growth on businesses?

• Higher revenues and higher profitability

• Lower revenues and lower profitability

• Higher revenues and lower profitability

• Lower revenues and higher profitability

What happens to production during a slump?

• GDP falls, production decreases

• GDP rises, production decreases

• GDP falls, production increases

• GDP rises, production increases