Which of the following sequences gives the correct order of the phases of the business cycle?

a.

Expansion, trough, peak, contraction

b.

Expansion, contraction, trough, peak

c.

Expansion, trough, contraction, peak

d.

Expansion, peak, contraction, trough

Question12

Inflation is likely to result when which of the following occurs?

a.

Aggregate demand declines

b.

Aggregate supply increases

c.

Incomes rise faster than outputs

d.

Outputs rise faster than incomes

Question13

The below table shows a typical movie night basket of goods for a family of four. What is the cost of the movie night basket in 2018 and 2019?

Price per unit in 2018

4 Movie Tickets - $9.50

2 Large Popcorns - $5.00

4 Large Soda - $4.50

Price per unit in 2019

4 Movie Tickets - $10.0

2 Large Popcorns - $5.25

4 Large Soda - $4.25

a.

$19.00 in 2018 and $19.50 in 2019

b.

$66 in 2018 and $19.50 in 2019

c.

$66.00 in 2018 and $67.50 in 2019

d.

$76.00 in 2018 and $78.00 in 2019

Question14

Which of the following correctly defines the Consumer Price Index?

a.

A price index for all final goods and services produced in the economy

b.

A price index including all consumer goods and services except food and energy

c.

A measure of the average change in the prices of all goods and services in the economy

d.

A measure of the total revenue from selling consumer goods and services in the economy

Question15

The implicit price deflator is 109 in 2020 and 106 in 2019 with base year 2018. Suppose that the nominal GDP in the U.S. is $20.3 trillion in 2020 and $19.8 trillion in 2019. Which of the following statements is true?

a.

The real GDP was $19.15 trillion in 2020

b.

The real GDP increased slightly in 2020 from 2019

c.

The real GDP decreased slightly in 2020 from 2019

d.

The real GDP was exactly $18.5 trillion in both 2020 and 2019

Question 16

Workers must do which of the following In order to be considered or counted as unemployed?

a.

Be without a job but be seeking a job

b.

Exclude themselves from the labor force

c.

Be without a job and not be seeking a job

d.

Repay an amount they earned by way of unemployment compensation

Question17

Which form of unemployment suggests workers need to seek education and training and to update their skill sets?

a.

Cyclical

b.

Functional

c.

Seasonal

d.

Structural

Question18

Which of the following scenarios could prompt government response to reduce unemployment?

a.

Product demand has declined due to a negative shock to the economy, and firms are now laying off workers to save on input costs

b.

The economy is going strong and cyclical unemployment is at 0% but there is still a positive structural and frictional unemployment rate

c.

Structural unemployment is at a high because of a strong foreign competition from importers of goods and services in the auto industry

d.

The economy is experiencing a high rate of frictional unemployment due to job applications requiring more extensive background checks

Question19

The below table shows the national accounts data (in billions) for Lapland, a hypothetical country in 2019. Which of the following accurately shows the value of Private Investment spending?

Personal consumption

$47.00

Social Security payments to households

$11.50

Private Investment spending

?

Government purchases

$10.70

Unemployment benefits payments

$3.50

Imports

$8.80

Exports

$6.50

GDP

$71.70

a.

$10.70 billion

b.

$11.70 billion

c.

$15.50 billion

d.

$16.30 billion

Question20

As disposable income increases while holding all else constant, what happens to consumer expenditures?

a.

They remain constant and GDP increases

b.

They increase by an amount consistent with the MPC and GDP increases

c.

They increase by an amount consistent with the MPC and GDP decreases

d.

They decrease by an amount consistent with the MPC and GDP increases