AnswersEconomics A-ICIntroduction to Macroeconomics

The Business Cycle Answers

10 verified answers2 views
1
Free Preview

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.
2
Free Preview

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

best

C
Consumers spend less, causing worker layoffs.
D
Demand falls, causing production to stay at its peak.
A
A recession begins, causing consumers to spend more.
G
Goods are overproduced, causing a surplus in jobs.
4

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.
5

Which of the following conditions is most indicative of recovery?

A
The economy has stopped shrinking.
B
The economy begins to peak.
C
The GDP continues to shrink.
D
The economy is growing again.
6

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
7

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
8

This is a graph of the business cycle.Time is measured along the x-axis. What is measured along the y-axis?

Question illustration
A
employment levels
B
prices
C
economic output
D
demand
9

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

A
Expansion
B
Peak
C
Contraction
D
Trough
10

Which statement best describes why it is difficult to sell a home during a recession?

M
Mortgage rates are high.
D
Demand greatly decreases.
M
Mortgages become unavailable.
H
Housing prices increase.
11

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

Question illustration
A
There is no link between prices and unemployment.
B
Rising unemployment rates drive prices higher.
C
Falling prices drive unemployment rates lower.
D
As unemployment rates rise, average prices fall.
12

When production is very high but demand is very low, it can lead to

A
a recession.
B
a recovery.
C
prosperity.
D
the peak.
13

Which statement best describes why it is difficult to sell a home during a recession?

A
Mortgage rates are high.
B
Demand greatly decreases.
C
Mortgages become unavailable.
D
Housing prices increase.
14

Which event most likely explains renewed demand in a recovery period?

A
Consumers choose to save more and spend less.
B
Economic policy renews consumer confidence and demand.
C
Producers decrease prices to prompt demand and recovery.
D
Production decreases to prompt increased demand.
15

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

A
by increasing unemployment benefits
B
by stopping government spending
C
by requiring firms to maintain production
D
by eliminating all tax breaks
16

This is a graph of the business cycle.Time is measured along the x-axis. What is measured along the y-axis?

Question illustration
A
employment levels
B
prices
C
economic output
D
demand
17

Which of the following conditions is most indicative of recovery?

A
The economy has stopped shrinking.
B
The economy begins to peak.
C
The GDP continues to shrink.
D
The economy is growing again.
18

Which best describes the nature of cause and effect in the context of the business cycle?

A
Consumers spend less, causing worker layoffs.
B
Demand falls, causing production to stay at its peak.
C
A recession begins, causing consumers to spend more.
D
Goods are overproduced, causing a surplus in jobs.
19

Which best describes what is represented in the business cycle model?

A
the interactions between producers and consumers
B
the change in production cost
C
macroeconomic trends
D
supply and demand trends
20

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

A
Expansion
B
Peak
C
Contraction
D
Trough

Did you find these answers helpful?

More from this Course

Quiz
24 verified answers

Introduction to Macroeconomics

Quiz
18 verified answers

Economic Growth

Quiz
17 verified answers

Introduction to Macroeconomics