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WorksheetsUnit 3 Business Cycle
Total questions: 39
Worksheet time: 22mins
Which letter on the graph represents a recession in the business cycle?
W
X
Y
Z
Which letter on the graph represents a trough in the business cycle?
W
X
Y
Z
Which letter on the graph represents a time when inflation is occurring in the business cycle?
W
X
Y
Z
In a typical business cycle, the trough is immediately followed by:
prosperity
recession
recovery
peak
Which of the following statements BEST describes the concept of the business cycle?
the flow of money from businesses to households as income
the flow of goods from businesses to households
the flow of money and goods from product markets to factor markets
alternating periods of economic growth and decline
The percentage of the labor force that is unemployed is the:
natural employment rate
unemployment rate
labor force rate
employment ratio
The Consumer Price Index (CPI) in an indicator of which of the following?
the size of an economy
where in the business cycle the economy is currently
the level of inflation or deflation
the presence of a budget deficit or surplus
Which of the following BEST represents the equation for GDP?
GDP = C + I + G + NX
GDP = C + I + G - taxes + NX
GDP = C + G + NX
GDP = C - CPI + G + NX
Which of the following would NOT be a part of GDP?
new residential (homes) construction
a new Ferrari purchased by Maliek
U.S.A. selling Chevrolets to Canada
Faith purchasing an antique dresser
Which of the following transactions WILL be counted in the official GDP?
Kasey sold her house at a huge gain
Morgan bought an iPhone 15 Pro
Yair bought illegally scalped tickets to the Atlanta United/Inter Miami game
Sebastian bought a 2017 Jeep Wrangler
Which of the following transactions is included in a current year’s GDP as INVESTMENT spending?
Ivana bought a play-gym set for her day-care business.
Daniel purchased his friend’s condo.
Jesus bought a new BMW.
Beronica bought a new washing machine for her house.
What type of unemployment does the cartoon depict? *automation: the use of automatic equipment (machines) in manufacturing
Frictional
Cyclical
Structural
Seasonal
Real GDP is nominal GDP adjusted for:
double counting
interest rates
population
changes in price
The IRS (Internal Revenue Service) lays off thousands of employees every year after April 15th (the deadline for citizens to file tax returns). This is an example of what type of unemployment? *These people work from Jan - Apr
A. Frictional
B. Cyclical
C. Structural
D. Seasonal
A recession causes the bat manufacturer Louisville Slugger to lay off 120 employees. What type of unemployment would this example BEST be described as?
A. Frictional
B. Cyclical
C. Structural
D. Seasonal
Zoey recently moved to Atlanta in order for her husband Chris to begin shooting a new film on location. Zoey is an experienced surgeon who is currently interviewing with several different hospitals in Atlanta. Zoey is currently experiencing what type of unemployment?
A. Frictional
B. Cyclical
C. Structural
D. Seasonal
An example of cyclical unemployment is a(n):
A. ski instructor who stops working at the ski resort in the Spring when the snow melts.
B. real estate agent who leaves a job in Texas and searches for a similar, higher paying job in California.
C. geologist who is permanently laid off from an oil company due to a new technological advance.
D. autoworker who is laid off from an automobile company due to a decline in sales caused by a recession.
Cyclical unemployment is often aided by which group’s actions?
A. businesses raise pay
B. unemployed get new training
C. government creates new policies
D. cannot be helped
What is the minimum number of consecutive quarters for a time to be considered a recession?
A. 1
B. 2
C. 4
D. 8
Who benefits from sudden and rapid inflation?
A. government
B. banks who have given out loans
C. those currently in debt
D. people who live on fixed income
If the Federal Reserve wants to decrease 10% unemployment from the COVID pandemic, it would?
A. reduce the discount rate
B. increase federal funds rate
C. increase the reserve requirement for banks
D. require banks to hold reserve deposits on all types of deposits
Which of the following persons is most likely to be NEGATIVELY affected by high inflation?
someone who owns a lot of real estate
a retired person on a fixed income
a wealthy investor
a person who is paying off a fixed rate loan
In the study of economics, a market basket is generally used to
advertise new products for a company
put things in while you walk around a store
compare prices of goods in order to calculate the Consumer Price Index
determine the total amount of the Gross Domestic Product in a year
The Federal Reserve institutes a contractionary monetary policy in order to reign in inflation. What is the likely consequence of such action?
The stock market will crash
The unemployment rate will rise
The unemployment rate will fall
The stock market will experience a boom
To enact a contractionary fiscal policy, which action would be chosen by the government?
reduce taxes
lower its discount rate
reduce government spending
lower the price of securities
Which is a monetary policy that would be useful in stopping deflation?
decreasing taxation
increasing the discount rate
increasing government spending
decreasing the reserve requirement
What consumer behavior is the Federal Reserve trying to encourage when it uses expansionary monetary policy?
increased saving and spending
decreased saving and spending
increased saving and reduced spending
decreased saving and increased spending
If the federal government wants to encourage businesses and consumers to spend more money, it would most likely
increase tax rates
decrease tax rates
increase the reserve requirement
decrease government spending
Which of these is likely to occur after the government increases taxes?
Annual deficits increase
The national debt increases
Consumer spending decreases
Government programs decrease
Which of these correctly completes the chart?
Fed Chair
Federal Open Market Committee
President of the United States
Senate and House of Representatives
If the Federal Open Market Committee (FOMC) wanted to fix high inflation in the economy, they would:
decrease the federal funds rate
increase the federal funds rate
decrease the reserve requirement
decrease the discount rate
What number is the labor force:
Full-time employed - 20 million
Not working but looking for work - 2 million
Part-time employed - 10 million
Discouraged workers - 1 million
31 million
32 million
33 million
22 million
A country’s government runs a budget deficit when which of the following occurs in a given year?
interest payments on the national debt exceeds spending on goods and services
Government spending exceeds tax revenues
the amount borrowed exceeds the interest payment on the national debt
the debt owed to foreigners exceeds the debt owed to a country’s citizens
Over a two-year period, the United States experienced an increase in the real GDP, low inflation, and a declining unemployment rate. For this period, the United States
was in an economic trough
was in a stagnant economic period
appeared to be entering a recession
was in the middle of an economic boom
Fred works at a costume shop every year BUT because of a recession and low sales numbers, Fred is let go during the middle of October. What type of unemployment?
cyclical
structural
frictional
seasonal
What is the percentage goals for GROWTH (GDP), INFLATION & UNEMPLOYMENT?
2% GDP growth, 2% inflation, 5% unemployment
3% GDP growth, 1% inflation, 4% unemployment
4% GDP growth, 3% inflation, 6% unemployment
5% GDP growth, 2% inflation, 3% unemployment
Extra Credit:
What is Coach Hunt’s greatest phobia (fear)?
Heights
Spiders
Public Speaking
Flying
Extra Credit: 1 point:
What is the CURRENT (estimation) NATIONAL DEBT?
Approximately $38 trillion
Approximately $22 trillion
Approximately $30 trillion
Approximately $25 trillion
Extra Credit: 5 points
Draw a business cycle graph for the United States that includes 2 peaks, prosperity, 1 trough, and a recession.
