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

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

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