Economics 231(04) Exam #3 Fall 2017 Which of the following best defines the busi

Question

Economics 231(04) Exam #3 Fall 2017 Which of the following best defines the business cycle? a. Fluctuations around a long-term growth trend b. Changes in economic activity due to natural causes c. Increase in the level of business activity over an extended period of time d. Changes in business activity due to wars Which of the following is not a phase a Peak Emlyn Norman 1. of the business cycle? 2. b. Expansion c. Trough d. recession e. inflation of the business cycle just following a trough is called aln 3. The portion 4. A recovery must occur after a Recession b. expansion c. peak d. depression A peak in the business cycle b. An expansion c A recession a. A period of rising prices An economic contraction is usually characterized by d. 5. a. Increased output b. Declining employment c. A gradual rise in consumers' incomes d. Increased investment spending by businesses 6 It is generally agreed that the U.S. economy is currently in the expansion phase of a business cycle. Which of the following is true? Equilibrium real GOP is growing b. Cyclical unemployment is increasing c. The natural rate of unemployment is increasing d. The GDP deflator must be declining 7. The term "inflation" is used to describe a situation in which a The overall level of prices in the economy is increasing b. Incomes in the economy are increasing Stock-market prices are rising The market value of all final goods and services produced by a country within some time period s termed a. Gross investment b. nets investment c. gross domestic product d. net domestic product The GDP figure does not accurately reflect economic welfare because a. c. d. the economy is growing rapidly 8. 9· It does not include nonmonetary transactions b. The value of goods produced in the home is usually overstated It includes only consumption goods and services c. 10. GDP that has been adjusted for changes in the price level since a base year is called 11. The consumer price index measures the increase in the price of a market basket d. it usually includes an overstated estimate of social costs a. Real GOP b. depreciation c. nominal GDP d. net investment a. Between the current year and the previous year c Between the previous two years d. b. Between the current year and the base year Between the current year and the base year while keeping prices constant

Explanation / Answer

1.a:Flucton around a long Run Growth trand :,2.e:inflation,3.b.Expansion,4.c.A recession ,5.b.Decling Employment,6.a.Equilibrium real GDP growing.7.The Over all level of Pricing in the Economy is Increasing.8.c. Gross Domestic Product.9.a. It does not include non-moneytary transactions .10.a.Real GDP.11.d. Bettween the current year and the base year while keeping prices constant.

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