Question 1

What is the business cycle? How "cyclical" is it? What causes the business cycle?

Accepted Answer

The answer of What is the business cycle? How "cyclical"...

Question 2

A war in the Middle East that disrupts U.S. economic activity is known as

Accepted Answer

A war in the Middle East would be considered an external shock to the U.S. economy, as it is an unforeseen event that originates outside of the country and has a significant impact on economic activity. This type of shock can disrupt trade, increase oil prices, and lead to uncertainty, all of which can negatively affect economic growth and stability.

Question 3

Changes in leading indicators signal

Accepted Answer

Leading indicators are used to predict the future direction of the economy. Therefore, changes in leading indicators signal the changes that are likely to occur in the economy. The other options mentioned in the answer choices are not relevant to leading indicators.

Question 4

The National Bureau of Economic Research is

Accepted Answer

The National Bureau of Economic Research is a nonprofit organization that is primarily concerned with evaluating and analyzing business cycles. While the organization may conduct research related to economic policy and monetary policy, this is not its primary focus.

Question 5

-Refer the above figure. Stage "1" of the economy is called

Accepted Answer

Stage "1" in economic cycles is typically referred to as the "peak," which marks the highest point of economic activity before a downturn begins.

Question 6

The period between the trough and the peak of a business fluctuation is called

Accepted Answer

The period between the trough (lowest point) and the peak (highest point) of a business fluctuation is called the expansion phase.

Question 7

A business fluctuation when the pace of economic activity is slowing down is called

Accepted Answer

A contraction is a phase of the business cycle where economic activity slows down, leading to reduced production, job losses, and decreased demand for goods and services. This can lead to a series of negative economic outcomes, such as decreased GDP and an increase in unemployment rates.

Question 8

-Refer the above figure. Stage "4" of the economy is called

Accepted Answer

Stage "4" of the economy is typically referred to as an expansion, which is a phase characterized by increasing economic activity, rising GDP, and lower unemployment rates.

Question 9

A business fluctuation when the pace of business activity is speeding up is known as

Accepted Answer

An expansion refers to a period of time when the pace of business activity is increasing or speeding up. This may include growing levels of production, employment, profitability, and overall economic growth.

Question 10

Typically during a recession,

Accepted Answer

During a recession, the economy experiences a decline in economic activity, leading to a decrease in consumer spending and investment. As a result, businesses may lay off workers, leading to an increase in unemployment. This decrease in economic activity also leads to a decrease in incomes for both individuals and businesses. Therefore, during a recession, incomes fall and unemployment rises, making choice C the best answer.

Question 11

-Refer the above figure. Stage "2" of the economy is called

Accepted Answer

The answer of 
-Refer the above figure. Stage "2" of...

Question 12

-Refer to the above figure. Stage "3" of the economy is called

Accepted Answer

Stage "3" in economic terms is referred to as a trough, which signifies the lowest point of the economic cycle, indicating the end of a recession before the start of an expansion.

Quiz 7: The Macroeconomy: Unemployment, Inflation, and Deflation