Economic Concepts Quiz

A recession is a long period of high unemployment, weak consumer sales, and business failures.

• True

• False

Economic growth refers to a steady increase in the production of goods and services in an economic system.

• True

• False

Inflation

• is most harmful to people living on fixed incomes.

• increases the buying power of the dollar.

• tends to decrease wages.

• always discourages economic growth.

The major influence on the level of interest rates is

• the supply and demand for money.

• the rate of inflation.

• the unemployment rate.

• the consumer price index.

Which of the following is an example of a capital project?

• A small office buys several boxes of paper for the printer.

• A large corporation gives all employees a 5 percent wage increase.

• A small business purchases two new pickup trucks.

• A mid-size company restocks the supply cabinet with pencils and markers.

Enter the appropriate word(s) to complete the statement. A bond represents __________ for an organization.

• Debt

• Equity

• Revenue

• Asset

Enter the appropriate word(s) to complete the statement. __________ represents ownership, or equity, in a corporation.

• Stock

• Bond

• Loan

• Deposit

Interest rates affect business activities in our economy by:

• Increasing borrowing costs, leading to reduced investment

• Decreasing borrowing costs, leading to increased investment

• Having no impact on business activities

• Only affecting large corporations

Gross domestic product (GDP) is a measure of what?

• The total value of goods and services produced in a country

• The total population of a country

• The total land area of a country

• The total number of businesses in a country

Which of the following is a characteristic of a recession?

• High consumer confidence

• Rising employment rates

• Decreased consumer spending

• Increased business investments