Question 1

A recession is characterized by rising _____ and falling:

Accepted Answer

A recession is characterized by rising unemployment due to decreased demand for goods and services, leading to falling output as businesses reduce production.

Question 2

During an economic expansion, _____ rises and _____ falls.

Accepted Answer

During an economic expansion, output rises as the economy grows, and unemployment falls as more jobs are created and filled.

Question 3

What is the difference between a recession and a depression?

Accepted Answer

A recession and a depression both involve rising unemployment and falling output, but the key difference is the severity and duration, with a depression being much more severe and prolonged than a recession.

Question 4

Seasonal adjustments to GDP occur because:

Accepted Answer

Seasonal adjustments to GDP are made to account for the fact that output in many industries varies by season, leading to fluctuations in quarterly GDP measures. This allows for a clearer comparison of economic activity across different periods by removing the effects of seasonal patterns.

Question 5

What term is used for the economic measures that tend to change in advance of the economy, moving from one stage of the business cycle to the next?

Accepted Answer

Leading economic indicators are metrics that change before the economy starts to follow a particular pattern, providing a way to predict future economic movements.

Question 6

Changes that are made to quarterly GDP measures for regular variations in output that occur during certain months each year in order to remove this predictable variation are referred to as _____ adjustments.

Accepted Answer

Seasonal adjustments are made to quarterly GDP measures to remove the predictable variation that occurs during certain months each year, allowing for a clearer comparison of economic performance across different periods without the noise of regular seasonal fluctuations.

Question 7

Which of the following is NOT a leading economic indicator?

Accepted Answer

Leading economic indicators are variables that change before the economy starts to follow a particular pattern, providing a way of predicting changes in the economy. The average inflation rate is not a leading indicator; it is more of a lagging indicator because it reflects prices that have already changed. In contrast, manufacturers' orders for durable goods, stock prices, and housing starts can all provide early signals about the direction of the economy.

Question 8

What is a lagging economic indicator?

Accepted Answer

Lagging indicators change after the economy has already begun to follow a particular pattern or trend, serving to confirm what has already happened.

Question 9

An example of a lagging economic indicator is the:

Accepted Answer

The unemployment rate is considered a lagging economic indicator because it tends to change after the economy has already begun to follow a particular trend. It reflects economic conditions that have already occurred, rather than predicting future economic activity.

Question 10

The trough stage of the business cycle is immediately followed by:

Accepted Answer

An expansion follows the trough stage in the business cycle, indicating a period of economic recovery and growth.

Question 11

When a recession ends, what stage of the business cycle is the economy entering?

Accepted Answer

The answer of When a recession ends, what stage of...

Question 12

What stage of the business cycle is immediately before a recession?

Accepted Answer

The stage immediately before a recession is the peak, which is the point at which the economy transitions from the end of an expansion into a downturn or recession.

Question 13

Economic growth is at its highest level during what stage of the business cycle?

Accepted Answer

The answer of Economic growth is at its highest level...

Question 14

(Figure: Business Cycle) In the figure, point A represents a:

Accepted Answer

The answer of (Figure: Business Cycle) In the figure, point...

Question 15

(Figure: Business Cycle) In the figure, point B represents a:

Accepted Answer

The answer of (Figure: Business Cycle) In the figure, point...

Question 16

(Figure: Business Cycle) In the figure, point C represents a:

Accepted Answer

The answer of (Figure: Business Cycle) In the figure, point...

Question 17

(Figure: Business Cycle) In the figure, point D represents a:

Accepted Answer

The answer of (Figure: Business Cycle) In the figure, point...

Question 18

What type of unemployment exists if the unemployed persons have skills that are different than the skills needed for the job openings that are available?

Accepted Answer

Structural unemployment occurs when there is a mismatch between the skills that workers offer and the skills demanded by employers. This can happen due to technological changes, shifts in the economy, or other factors that change the nature of job opportunities.

Question 19

There are not as many job openings as there are unemployed people. This is called _____ unemployment.

Accepted Answer

Cyclical unemployment occurs when there is not enough demand for goods and services in the economy, leading to a lack of job openings relative to the number of unemployed people.

Question 20

Immediately after Ken's university graduation, he begins looking for employment and finds a job that will begin two months after his graduation. During the time that he is searching for his new job, Ken would be classified as being _______ unemployed.

Accepted Answer

Frictional unemployment occurs when individuals are temporarily unemployed while transitioning from one job to another or entering the workforce for the first time, as in Ken's case after graduation.

Quiz 21: Unemployment and the Business Cycle

A recession is characterized by rising _____ and falling:

During an economic expansion, _ rises and _ falls.

What is the difference between a recession and a depression?

Seasonal adjustments to GDP occur because:

What term is used for the economic measures that tend to change in advance of the economy, moving from one stage of the business cycle to the next?

Changes that are made to quarterly GDP measures for regular variations in output that occur during certain months each year in order to remove this predictable variation are referred to as _____ adjustments.

Which of the following is NOT a leading economic indicator?

What is a lagging economic indicator?

An example of a lagging economic indicator is the:

The trough stage of the business cycle is immediately followed by:

When a recession ends, what stage of the business cycle is the economy entering?

What stage of the business cycle is immediately before a recession?

Economic growth is at its highest level during what stage of the business cycle?

(Figure: Business Cycle) In the figure, point A represents a:

(Figure: Business Cycle) In the figure, point B represents a:

(Figure: Business Cycle) In the figure, point C represents a:

(Figure: Business Cycle) In the figure, point D represents a:

What type of unemployment exists if the unemployed persons have skills that are different than the skills needed for the job openings that are available?

There are not as many job openings as there are unemployed people. This is called _____ unemployment.

Immediately after Ken's university graduation, he begins looking for employment and finds a job that will begin two months after his graduation. During the time that he is searching for his new job, Ken would be classified as being _______ unemployed.