ECON - Unit 4 Practice Test

Point #4 on the graph indicates a __________ of the business cycle.

• Peak

• Trough

• Contraction

• Expansion

You buy a new Toyota Tacoma that was made in Japan. Which sector of the GDP equation would include this purchase?

• Consumer Spending

• Investment Spending

• Government Spending

• Net Exports

Every year, individuals must file their personal taxes with the IRS. The form used to submit personal tax information to the IRS is called

• 1099

• W-2

• 1040

• W-4

Point #1 on the graph indicates a __________ of the business cycle.

• Peak

• Trough

• Contraction

• Expansion

Luigi the Plumber purchases a two-year old used truck. Is this purchase included in the GDP calculation?

• Yes

• No

Gross Domestic Product is a method for calculating how much a country produces by adding which four spending categories?

• Consumption, Investment, Government, Net Exports

• Consumption, Investment, Government, Business expenditures

• Consumption, Interest Rates, Government, Net Exports

• Wages, Rent, Interest, Profit

Fiscal policy refers to the power of the federal government to

• Regulate interstate commerce

• Control credit

• Print money

• Tax and spend

Point #2 on the graph indicates a __________ of the business cycle.

• Peak

• Trough

• Contraction

• Expansion

A market basket is generally used to

• advertise new products for companies.

• compare prices of goods between years to calculate the consumer price index.

• determine the total amount of real gross domestic product.

• compare prices of goods between competing stores.

The U.S Air Force buys 5 new fighter jets for $2 billion Which sector of the GDP equation would include this purchase?

• Consumer Spending

• Investment Spending

• Government Spending

• Net Exports