The Business Cycle

Question 1

Which point marks a peak? Which point marks a trough? Which point marks a recession? Which point marks a recovery?

Revolt · Accepted Answer

2; Selection 1: 2; Selection 2: 4; Selection 3: 3; Selection 4: 5

Question 2

How does the business cycle affect consumers? Check all that apply.

Revolt · Accepted Answer

It can be harder to find a job during an economic depression.; People tend to make more money during an expansion.; Prices on gas and food will tend to increase during an expansion.

Question 3

At which point of the business cycle would prices probably be highest?

Revolt · Accepted Answer

during a peak

Question 4

Examine this graph representing US unemployment rates. Which of these years might economists consider a trough?

Revolt · Accepted Answer

1985

Question 5

A family is trying to sell their home at point 2 on the graph.How might this affect the sale of their home? Check all that apply.

Revolt · Accepted Answer

Their home will likely sell for a low price.; Their home will likely take longer to sell.; Their home will likely increase in value if they wait.

Question 6

Imagine a shoe store has a large number of shoes in its warehouse. The store owner believes the economy has peaked and a recession is coming soon.If this is true, what should the store owner do?

Revolt · Accepted Answer

Advertise a sale and sell as many shoes as possible before prices fall. Plan for falling demand and consider ways to keep workers employed; at the recession's trough, consider using the proceeds to expand when costs are low.

The Business Cycle Answers

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