#1
Which of the following is a characteristic of the expansion phase of the business cycle?
Rising unemployment rates
Decreasing GDP
Increasing consumer spending
Falling prices
#2
Which of the following is a characteristic of the trough phase of the business cycle?
High inflation
Peak employment
Declining GDP
Stable consumer confidence
#3
Which of the following is NOT a component of aggregate demand?
Consumption
Investment
Government spending
Imports
#4
What is the term for the total value of all goods and services produced within a country's borders in a specific time period?
Gross domestic product (GDP)
Net exports
Disposable income
Aggregate demand
#5
What does the term 'Okun's law' describe in macroeconomics?
The relationship between inflation and unemployment
The relationship between interest rates and investment
The relationship between government spending and economic growth
The relationship between unemployment and GDP
#6
What typically occurs during the peak phase of the business cycle?
Low inflation
High levels of production
Rising interest rates
Increased investment
#7
What economic indicator is often used to identify a recession?
GDP growth rate
Consumer price index (CPI)
Unemployment rate
Stock market performance
#8
During the contraction phase of the business cycle, what happens to business activity?
It increases
It remains constant
It decreases
It becomes unpredictable
#9
Which of the following is a characteristic of stagflation?
High inflation and high unemployment
Low inflation and low unemployment
High inflation and low interest rates
Low inflation and high GDP growth
#10
What is the term for the situation where the actual output of an economy is less than its potential output?
Stagflation
Depression
Recessionary gap
Inflationary gap
#11
Which of the following is a fiscal policy measure used to combat a recession?
Decreasing government spending
Lowering taxes
Increasing interest rates
Reducing money supply
#12
What is the role of central banks during an economic downturn?
Increasing interest rates to stimulate borrowing
Implementing expansionary monetary policy
Reducing government spending
Encouraging deflation to boost consumer spending
#13
What is the term for a period of sustained economic growth and low unemployment?
Recession
Expansion
Depression
Stagnation
#14
In the context of fiscal policy, what is the crowding-out effect?
Increase in government spending leading to increased private investment
Decrease in government spending leading to increased private consumption
Increase in government borrowing leading to reduced private sector borrowing
Decrease in government borrowing leading to increased private sector borrowing
#15
Which of the following is NOT a tool of monetary policy?
Open market operations
Reserve requirements
Fiscal stimulus
Discount rate