Economic Growth and Business Cycles Quiz

Economic growth is marked by a sustained increase in a country's real Gross Domestic Product (GDP) over an extended period.

GDP is the primary indicator used to measure the overall economic growth of a country, representing the total value of all goods and services produced.

When prices rise consistently over time, it signifies inflation, which can accompany periods of economic growth.

Stagnation is not a distinct phase of the business cycle; the recognized phases are expansion, peak, recession, and trough.

GDP represents the total value of all final goods and services produced within a country's borders during a specific time frame.

A recession is a phase of the business cycle characterized by a decline in economic activity, often marked by reduced GDP, employment, and consumer spending.

A recession is a phase of the business cycle marked by economic decline, high unemployment, and reduced consumer spending.

Keynesian economics attributes business cycles to fluctuations in aggregate demand, impacting overall economic activity.

A depression is an extended period of economic contraction, characterized by widespread unemployment, reduced industrial production, and low consumer spending.

Contrary to economic recessions, an increase in business investments is not a typical characteristic; recessions are characterized by decreased economic activity.

A depression is characterized by prolonged negative economic growth, often accompanied by high unemployment and economic hardship.

Unemployment benefits are not considered in GDP calculations; GDP includes only the value of final goods and services produced within a country.

While climate change is a global concern, it is not typically considered a direct factor affecting day-to-day economic growth.

During a recession, governments often employ expansionary monetary and fiscal policies to stimulate economic activity and mitigate the downturn.

Robert Solow is recognized for his contributions to modern economics and pioneering the Solow Growth Model, explaining factors influencing long-term economic growth.

The consumer confidence index serves as a leading indicator, reflecting consumer sentiments and predicting economic trends, including growth or contraction.

An inflationary gap occurs when an economy produces more than its potential, leading to increased prices and inflation.

Joseph Schumpeter introduced the concept of creative destruction, emphasizing the role of innovation and the replacement of old industries in fostering economic growth.

The Gini coefficient is a statistical measure indicating the level of income inequality within a country, with higher values representing greater inequality.

The output gap represents the difference between an economy's potential and actual GDP, indicating underutilized or excess resources.