1. Unit 4—Business Cycles Review made by students.

2. Growth lessens the burden of  A. Scarcity  B. The recession  C. Inflation  D. The government

3. What was the unemployment rate during the Great Depression?  A. 70%  B. 5%  C. 25%  D. 50%

4. Which of the following is not a cause of inflation?  A. Demand-pull  B. Supply-side  C. Cost-push  D. Stock-buy

5. How long would it take for prices to double if the inflation rate is 7%?  A. 7 years  B. 6 years  C. 10 years  D. 20 years

6. Discouraged workers are not  A. Necessarily seeking work  B. Correctly seeking work  C. Actively seeking work  D. Willingly seeking work

7. Growth of a nation is important because  A. It means more material will be in abundance  B. It sets a standard for other nations to strive for  C. It lessens the scarcity burden  D. Both A and C

8. What are the types of unemployment?  A. Seasonal, cyclical, detrimental and beneficial.  B. Real and estimated  C. Seasonal, cyclical, structural and frictional  D. There are no types of unemployment. There is just inflation.

9. The discouraged  A. Understate the unemployment rate  B. Overstate the unemployment rate  C. Are counted as officially unemployed  D. Are structurally unemployed

10. Which of these is not a cause of inflation?  A. Too much money chasing too few goods.  B. Not enough supply of goods and services.  C. Too many people being employed.  D. None of these

11. The peak in the business cycle is  A. The point where output starts to decline.  B. When business activity reaches a temporary max.  C. The beginning of a recession.  D. All of the above.

12. Jerry works as Santa in the mall every winter. The is an example of  A. Frictional unemployment  B. Structural unemployment  C. Seasonal unemployment  D. Cyclical unemployment

13. Which word best describes the lowest point of a recession?  A. Peak  B. Trough  C. Median  D. High point

14. Wage inflation is caused by  A. Too many unions  B. Too many employed  C. Too many politicians  D. Too few producers

15. What is the Rule of 70?  A. Approximate number of years to double the rGDP.  B. A rule that states rGDP is always 70.  C. A rule that has nothing to do with economics.  D. None of the above.

16. All of the following are unequal burdens (of unemployment) except:  A. Occupation  B. Age  C. Race  D. Inflation

17. The natural rate of unemployment can be found by adding:  A. Cyclical and structural  B. Structural and seasonal  C. Frictional and cyclical  D. Structural and frictional

18. You have just graduated from college and are looking for your first real job. What type of unemployment?  A. Cyclical  B. Seasonal  C. Frictional  D. Structural

19. When the country goes in the recessionary phase  A. Output and income increase  B. Output and income level out  C. Must be a decrease in rGDP for two cycles  D. As contraction continues, inflationary pressures increase

20. If the NRU is 4% and actual unemployment is 8%, what is the GDP gap?  A. 4%  B. 8%  C. 16%  D. 32%

21. A general rising of the level of prices  A. Deflation  B. Recession  C. Inflation  D. Accumulation

22. The rate of growth record shows that rGDP has grown ? per year since 1950 and per capita ? per year.  A. 5% and 6%  B. 2% and 3.1%  C. 4.2% and 1.9%  D. 3.1% and 2%

23. During a recession  A. Inflationary pressure subsides  B. Output increases towards full employment  C. Inflation accelerates  D. There is aggregate spending

24. Political cuts in supply could cause  A. Output to rise  B. Employment to rise  C. Unemployment to rise  D. Output and employment to decline

25. The business cycles graph includes  A. Peak  B. Inflation point  C. Crest  D. # of waves

26. The rule of 70  A. Works for the doubling time of anything  B. Doesn’t exist  C. Shows the percentage of national bankruptcy  D. Doesn’t apply to inflation

27. When output increases towards full employment  A. Expansionary / recovery  B. Expansionary / recession  C. Expository / recovery  D. Expository / recession

28. A secretary who only knows how to use a typewriter is unemployed. What type of unemployment is it?  A. Frictional  B. Seasonal  C. Structural  D. Cyclical

29. What is one of the main sources of growth?  A. Gov’t threatens a tax if a company does not reach a productivity level.  B. A company increases their productivity of existing inputs.  C. Gov’t brings prices down so consumers will spend more of their money.  D. A company starts underground selling.

30. Economically, a peak is  A. Top of the mountain  B. Where business reaches a maximum  C. Point at which output declines  D. Both B and C

31. A DEEP trough is  A. A recession  B. A “bump in the road”  C. Cyclical fluctuation  D. A depression

32. How long does a recession typically last?  A. 5 to 6 years  B. 12 to 18 months  C. 6 to 12 weeks  D. 18 to 25 months

33. Which TWO races are usually affected by unemployment the most?  A. Hispanic  B. White  C. Black  D. Asian

34. Too much money chasing too few goods  A. Cost-push  B. Supply-side  C. Demand-pull  D. Cyclical fluctuations

35. Unemployment/labor force X 100  A. Inflation rate  B. Full efficiency  C. Unemployment rate  D. rGDP

36. Growth is based on  A. Increase in nGDP  B. Increase in nGDP per capita  C. Increase in rGDP per capita  D. China’s lead based paint

37. A business cycle is measured from  A. Peak to trough  B. Trough to trough  C. Peak to recession  D. Peak to peak

38. What decreases more during a recession?  A. Durable goods  B. Nondurable goods  C. Both  D. None of the above

39. Okun’s law measures the difference between  A. rGDP and nGDP  B. Actual GDP and potential GDP  C. GDP and NDP  D. Negative GDP and positive GDP