Which of the following correctly identifies the four main stages of the business cycle?

• Growth, Boom, Decline, Collapse

• Expansion, Peak, Recession, Trough

• Growth, Boom, Recession, Slump

• Recovery, Stability, Crisis, Decline

Which stage of the business cycle is characterized by high consumer confidence, rising incomes, and increased business investment?

• Boom

• Recession

• Slump

• Growth

During a recession, which of the following is most likely to occur?

• Increased consumer spending

• Lower unemployment

• Reduced business profits

• High business expansion

What happens to demand for luxury goods during a slump?

• It increases significantly

• It remains stable

• It falls sharply

• It becomes unpredictable

Which business decision is most appropriate during the growth phase of the business cycle?

• Reducing production levels

• Investing in new machinery

• Laying off employees

• Cutting prices to attract demand

What does Gross Domestic Product (GDP) measure?

• The total government spending in an economy

• The total value of goods and services produced in an economy

• The average income of workers in a country

• The total amount of money in circulation

How does rising unemployment typically affect businesses?

• It leads to higher demand for goods and services

• Consumers have less disposable income

• Wages increase significantly

• Businesses expand rapidly

Which of the following is NOT a likely effect of high inflation?

• Increased costs for businesses

• Decreased consumer purchasing power

• Reduced borrowing costs for businesses

• Higher prices for goods and services

Which of the following is a possible advantage of low inflation for businesses?

• Lower production costs

• Lower consumer spending

• Higher interest rates

• Increased costs of raw materials

If GDP is increasing, what is most likely happening in the economy?

• a) Businesses are struggling with low sales

• b) More goods and services are being produced

• c) The economy is in a recession

• d) Unemployment is rising