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The Business Cycle Answers

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C
Car dealerships have minimal overstock.
C
Car dealerships are not restocking.
C
Car dealerships cannot sell their stock.
C
Car dealerships cannot obtain stock.
2
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Read a passage from a speech given by President Barack Obama.Because of this plan, families who are struggling to pay tuition costs will receive a $2,500 tax credit . . . And Americans who have lost their jobs in this recession will be able to receive extended unemployment benefits.–President Barack Obama, February 4, 2009

A
It describes government measures to stimulate demand and bring about a recovery.
B
It describes government measures to increase production and bring about a depression.
C
It describes a shift in government policies during a trough on the business cycle.
D
It describes a shift in government policies during a peak on the business cycle.
3

Which stage of the business cycle is an economy in when it reaches its low point?

A
Expansion
B
Peak
C
Contraction
D
Trough
4

Which of the following is a characteristic of prosperity in the peak phase of the business cycle?

s
stagnant prices
h
high levels of production
a
ambivalence about the economy
r
reduced incomes
5

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t
the interactions between producers and consumers
t
the change in production cost
m
macroeconomic trends
s
supply and demand trends
6

Why might buying a home during a recession be a good decision for some consumers? Choose three answers.Housing prices are down.It is easier to get a mortgage.Less demand means more options for buyers.Less demand means less competition with other buyers.Fewer houses are on the market.

H
Housing prices are down.
I
It is easier to get a mortgage.
L
Less demand means more options for buyers.
L
Less demand means less competition with other buyers.
F
Fewer houses are on the market.
7

Income reaches the highest level at the point of the business cycle.

Answer not available
8

During a recession, what is one way governments try to encourage growth?

b
by increasing unemployment benefits
b
by stopping government spending
b
by requiring firms to maintain production
b
by eliminating all tax breaks
9

The graphs show the US unemployment rate and the price of whole milk between 2006 and 2012.

Question illustration
T
There is no link between prices and unemployment.
R
Rising unemployment rates drive prices higher.
F
Falling prices drive unemployment rates lower.
A
As unemployment rates rise, average prices fall.
10

There are five stages in a recession. 1. job loss2. falling production3. falling demand (occurs twice)4. peak production In which order do these stages occur?

4
4, 3, 2, 1, 3
3
3, 2, 1, 3, 4
4
4, 3, 2, 3, 1
4
4, 2, 3, 1, 3

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