#1
Which of the following is NOT a common cause of economic downturns?
Decreased consumer spending
Rising government expenditure
Credit crunches
Decline in business investment
#2
What economic indicator typically decreases during an economic downturn?
Unemployment rate
Gross Domestic Product (GDP)
Consumer Price Index (CPI)
Stock market indices
#3
What is the term for a prolonged period of economic decline across multiple sectors of the economy?
Economic recession
Economic depression
Economic stagnation
Economic inflation
#4
Which of the following is a fiscal policy tool used to counteract economic downturns?
Raising interest rates
Increasing government spending
Reducing taxes
Conducting open market operations
#5
What is the term used to describe a period of negative economic growth lasting for two consecutive quarters?
Economic downturn
Economic contraction
Economic recession
Economic depression
#6
Which of the following is a typical symptom of an economic downturn?
Rising inflation rates
Decreasing interest rates
Increasing consumer confidence
Declining business profits
#7
What is a liquidity trap in economics?
A situation where interest rates are very high
A situation where money supply is very low
A situation where monetary policy becomes ineffective
A situation where there is excess money in circulation
#8
During an economic downturn, which sector typically experiences the most severe impact?
Financial services
Healthcare
Technology
Manufacturing
#9
What role does the central bank typically play during an economic downturn?
Increasing interest rates to curb inflation
Reducing interest rates to stimulate borrowing and spending
Implementing austerity measures to reduce government debt
Decreasing money supply to control inflation
#10
What is the term for a sudden, severe downturn in the economy, often lasting for a short period?
Economic downturn
Economic collapse
Economic shock
Economic recession
#11
What is the term for a situation where the demand for goods and services falls drastically, leading to decreased production and increased unemployment?
Stagflation
Deflation
Demand-pull inflation
Demand shock
#12
What is the term for a sudden, unexpected event that causes significant economic disruption?
Economic downturn
Black swan event
Market correction
Economic shock
#13
What is the 'wealth effect' in the context of economic downturns?
The tendency of people to save more during downturns
The impact of changes in asset prices on consumer spending
The increase in government intervention during downturns
The redistribution of wealth from the rich to the poor
#14
Which of the following is NOT a characteristic of an economic downturn?
Increased consumer confidence
Rising unemployment
Decreasing industrial production
Declining consumer spending
#15
What is the term for a situation where investors withdraw their capital from financial markets, leading to a rapid decline in asset prices?
Market expansion
Market liquidity
Market panic
Market recession
#16
What is the term for a situation where the rate of inflation is high, economic growth is slow, and unemployment is high?
Hyperinflation
Deflation
Stagflation
Recession
#17
What is the term for a situation where banks reduce lending and credit availability, leading to decreased spending and investment?
Liquidity crunch
Credit squeeze
Monetary contraction
Financial squeeze