Question 1

The period of growth in real GDP between the trough of the business cycle and the next peak is called the

Accepted Answer

The period of growth in real GDP between the trough (or bottom) of the business cycle and the next peak (or top) is called the expansionary phase. This is when economic output and employment are increasing, and businesses are expanding.

Question 2

The distinguishing characteristics of business cycles are

Accepted Answer

Business cycles are characterized by recurring patterns of growth and decline in real (inflation-adjusted) output, employment, and other economic indicators. These cycles typically consist of four phases: expansion, peak, contraction, and trough. During the expansion phase, real output usually grows at an increasing rate, employment rises, and inflation may also increase. The peak marks the end of the expansion phase and the beginning of the contraction phase, during which real output falls, employment declines, and inflation may decrease. The trough marks the end of the contraction phase and the beginning of the next expansion phase. Thus, the distinguishing characteristic of business cycles is periods of growth in real output followed by periods of decline, making D the correct choice.

Question 3

The labor force participation rate of women in the United States has been

Accepted Answer

The labor force participation rate of women in the United States has been increasing for several decades. This is due to factors such as increased access to education and job opportunities, as well as a shift in cultural attitudes towards women in the workforce.

Question 4

Which of the following will most likely occur during the contractionary phase of a business cycle?

Accepted Answer

During contractionary phase of a business cycle, economic activity slows down, leading to a decline in output and sales of businesses. This decline in output leads to a rise in unemployment rates as businesses start to decrease their workforce or stop hiring new employees.

Question 5

The expansionary phase of the business cycle is characterized by

Accepted Answer

The expansionary phase of the business cycle is characterized by increasing real output and declining unemployment, as businesses are expanding their output and hiring more workers to meet the increasing demand for goods and services.

Question 6

Which of the following will most likely occur during the expansionary phase of a business cycle?

Accepted Answer

During the expansionary phase of the business cycle, the economy is growing, and as a result, Real GDP increases. This growth leads to an increase in demand for goods and services, prompting firms to increase production, and consequently, unemployment rate falls.

Question 7

Suppose there was a country with an adult (age 16 and over)population of 1,000,of which 100 were unemployed and 700 were employed.Which of the following is true?

Accepted Answer

The answer of Suppose there was a country with an...

Question 8

The recessionary phase of the business cycle is characterized by

Accepted Answer

During the recessionary phase of the business cycle, there is a decrease in real output and an increase in unemployment, which is reflected in the contraction of economic activity. This is due to a decrease in consumer spending, investment spending, and overall demand for goods and services. Therefore, choice A is the best answer.

Question 9

Suppose an economy is operating at its maximum sustainable output rate.Neither recession nor economic boom are present.Which of the following would be true?

Accepted Answer

If the economy is operating at its maximum sustainable output rate, it means that the output gap is zero, which implies that the economy is operating at full employment. Therefore, option A is the correct answer. Option B cannot be true because actual GDP would be equal to potential GDP at maximum sustainable output. Option C cannot be true because the natural rate of unemployment is a long-term concept, and this scenario only describes the current state. Option D is also incorrect because full employment means that all available labor is employed, but not necessarily 100% of the labor force.

Question 10

Which of the following is true?

Accepted Answer

The answer of Which of the following is true?
...

Question 11

During this century,the growth rate of real GDP in the United States has averaged approximately

Accepted Answer

The growth rate of real GDP in the United States has averaged approximately 3 percent during this century. This is based on data from the Bureau of Economic Analysis, which shows that the average annual growth rate of real GDP from 2001 to 2019 was 2.2 percent. However, if we exclude the years affected by the Great Recession (2008-2009), the average annual growth rate from 2001 to 2007 and from 2010 to 2019 was approximately 3 percent.

Question 12

Frictional unemployment is the result of

Accepted Answer

Frictional unemployment refers to the temporary period of unemployment people experience while they search for a new job or change careers. This type of unemployment is generally considered to be voluntary and short-term. It can result from a variety of factors, including imperfect information about job openings, geographic barriers to employment, and personal preferences for certain types of work. It does not result from a lack of available jobs, a mismatch between workers' skills and available jobs, or a decline in demand for labor.

Question 13

The period of declining growth in real GDP between the peak of the business cycle and the trough is called the

Accepted Answer

The period of declining growth in real GDP between the peak of the business cycle and the trough is called the contractionary phase. This is the phase where economic activity slows down and unemployment rises, typically accompanied by a slowdown in inflation or even deflation.

Question 14

Suppose that the consumer price index at year-end 2008 was 140 and by year-end 2009 had risen to 150.What was the inflation rate during 2009?

Accepted Answer

The answer of Suppose that the consumer price index at...

Question 15

During a sustained economic expansion,

Accepted Answer

During a sustained economic expansion, businesses are growing and creating jobs, which leads to a decrease in the rate of unemployment and an increase in the employment/population ratio.

Question 16

Which of the following individuals would be considered unemployed by the official government definition?

Accepted Answer

Ralph is considered unemployed because he is on temporary layoff and is available for work, fitting the official definition of unemployment.

Question 17

The type of unemployment caused by changes in the business cycle is

Accepted Answer

Cyclical unemployment refers to the fluctuation of economic activity that occurs as a result of changes in the business cycle, leading to decreases in demand for goods and services and resulting in job losses. Therefore, the type of unemployment caused by changes in the business cycle is cyclical unemployment.

Question 18

Economists use the phrase "business cycle" when referring to fluctuations in

Accepted Answer

The business cycle refers to the natural cycle of economic growth and contraction in a market economy, which affects the rate of real output and employment. The other options are not directly related to the business cycle.

Question 19

During a period of rapid growth in output,

Accepted Answer

During a period of rapid growth in output, there is a higher demand for labor which results in an increase in employment and a decrease in unemployment. Therefore, choice A is the best option.

Question 20

Economists use the term "business cycle" to refer to

Accepted Answer

The term "business cycle" refers to the fluctuations in the level of real output and employment, which typically occur over a period of several years. These fluctuations consist of alternating periods of economic expansion and contraction, with the economy transitioning from a peak period of high output to a trough period of low output before starting to expand again. This cyclical pattern is influenced by various factors, including changes in consumer and business confidence, interest rates, investment, and government policies.

Quiz 8: Economic Fluctuations, unemployment, and Inflation