WorksheetsITBC Chapter 3 - Test Application Questions Practice
Total questions: 20
Worksheet time: 10mins
When Olivia pays for a haircut or William visits a doctor for medical care, are these services included in GDP?
True
False
James goes to the grocery store and notices that the prices of everyday items have increased, and his money now buys less than before. Is the economy experiencing deflation?
True
False
Daniel was laid off from his job and is actively looking for work. Is Daniel counted as unemployed?
True
False
Liam is studying the business cycle in his economics class. He learns about the stage called 'prosperity.' Is it true that prosperity is a stage of the business cycle with high unemployment?
True
False
The business cycle shows that economies stay the same over time.
Imagine a city where the economy is changing. Which action would MOST likely increase consumer spending?
Higher unemployment
Lower wages
More people having jobs
Businesses cutting production
Which of the following is an example of something NOT counted in GDP?
A new computer purchased by a school
A restaurant meal
Babysitting your neighbor’s child for pay
A used car sold online
Which group has the GREATEST direct impact on the economy through daily decisions?
Consumers only
Business owners only
Government officials only
Foreign countries
What usually happens to unemployment during a recession?
It decreases
It increases
It stays the same
It disappears
Which situation best describes inflation?
Prices falling and wages rising
Prices rising faster than incomes
More goods being produced
GDP increasing
Kai works at a company that has stopped hiring new employees and has cut worker hours because sales are falling. This is MOST likely happening during which stage of the business cycle?
Prosperity
Recovery
Recession
Inflation
Sophia and her coworkers at a local factory have recently heard rumors about possible layoffs. If people like Sophia are worried about losing their jobs, what will MOST likely happen to the economy?
Businesses will raise wages
GDP will immediately rise
Consumer spending will increase
Consumer spending will decrease
After a hurricane damages factories in a city, supplies of goods become limited. What economic effect is MOST likely?
Lower prices
Inflation due to shortages
Increased GDP immediately
Lower unemployment
When a major car manufacturer lays off workers, suppliers and local businesses also experience job losses. Which situation does this best illustrate?
Prices rising at grocery stores
One factory expanding production
Layoffs in one industry causing job losses in others
Government lowering taxes
After a long economic downturn, a local newspaper reports several changes in the community. Which event would MOST likely signal the start of recovery?
GDP continuing to fall
Businesses closing permanently
Consumer confidence dropping
Companies beginning to hire workers
Sophia runs a small business and notices that more people are getting hired and her company's production is increasing. Which stage of the business cycle is Sophia's business most likely experiencing?
Recession
Recovery
Inflation
Prosperity
Aria notices that the prices of groceries and other everyday items are rising quickly in her city. She also finds that her money doesn't buy as much as it used to, and the value of her savings is decreasing. Which of the following is NOT a direct result of high inflation?
Purchasing power decreases
Money loses value
Prices rise quickly
Unemployment drops to zero
What is the ideal (healthy) rate for GDP?
2-4%
Below 3%
Below 5%
What is the ideal (healthy) rate for Inflation?
2-4%
Below 3%
Below 5%
What is one reason why the Federal Reserve might decide to lower interest rates?
