Econ 102 - Principles of Macroeconomics » Fall 2022 » Business Cycle Quiz

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Question #1
A new technological innovation would increase
A.   labor hours worked.
B.   labor productivity.
C.   population growth.
D.   the labor force.
Question #2
A recession is defined by economists as a time period when:
A.   real GDP has declined for at least two quarters
B.   business profits are falling
C.   consumer confidence is low
D.   unemployment is rising
Question #3
According to economists, one of the signs of an unhealthy economy is a(n)
A.   increasing real GDP.
B.   rising labor productivity.
C.   declining real GDP.
D.   declining unemployment.
Question #4
During the Great Depression which of the following was true?
A.   business profits were growing
B.   consumer confidence was euphoric
C.   the rate of investment was negative
D.   the rate of inflation was increasing
Question #5
Environmentalists worry that economic growth imposes costs on society. Among these costs are
A.   All of these are costs.
B.   crowding.
C.   waste disposal.
D.   pollution.
Question #6
Human Capital refers to.
A.   tools and machinery
B.   plant and equipment
C.   the ability of humans to make capital goods
D.   education, training and health of a labor force
Question #7
If the capital stock increases, then the economy can produce ____ output with the ____ amount of labor.
A.   same, same
B.   more, same
C.   less, same
D.   less, less
Question #8
If the government chose to increase purchases (G) on education
A.   There will be no impact on output
B.   Labor productivity should decline
C.   Potential output should increase
D.   Potential output should decrease
Question #9
One basic way to boost the nation's growth rate is to
A.   increase wages paid to labor.
B.   accumulate less capital
C.   reduce the population growth rate.
D.   increase the rate of technical progress.
Question #10
One of the key factors that determine an economy's real GDP is labor productivity, which is a measure of
A.   output per hour of work.
B.   total hours worked.
C.   labor force per hour.
D.   input per hour worked.
Question #11
Potential GDP is an estimate of the economy's ability to produce goods and services if the
A.   labor force is fully employed.
B.   federal budget is balanced.
C.   price level is stable.
D.   trade balance is zero.
Question #12
The phase of a business cycle during which real GDP reaches it's minimum level is the:
A.   recession
B.   recovery
C.   depression
D.   trough
Question #13
Which of the following statements is true?
A.   Full employment exists in an economy when the unemployment rate equals the sum of frictional and cyclical unemployment rates.
B.   The four phases of the business cycle, in order, are peak, recovery, trough and recession.
C.   Generally during a prosperity period wages rise as unemployment falls.
D.   When unemployment is rising, then real GDP is rising.
Question #14
Which of the following indicators is a leading indicator?
A.   unemployment
B.   interest rates
C.   business profits
D.   inflation
Question #15
Which of the following indicators is a counter-cyclical indicator?
A.   unemployment
B.   inflation
C.   interest rates
D.   business profits

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