Chapter 27 - Diego Heredia

Question 1

Mention the main stages of the business cycle

Answer 1

growth, boom, recession, slump

Question 2

Define of Inflation

Answer 2

Inflation is the increase in the average price level of goods and services over time

Question 3

Outline the consequence of unemployment

Answer 3

Unemployed people do not produce goods government pays unemployed people

Question 4

Define unemployment

Answer 4

Unemployment exists when people who are willing to work cannot find a job

Question 5

Mention the consequences of high levels of unemployment

Answer 5

Easier to recruit employees
Income and sales of business will be reduced
However, some business that sell cheap products might experience higher sales in this period of time

Question 6

Definition of exports

Answer 6

Exports are goods and services sold from one country to other countries

Question 7

Definition of imports

Answer 7

Imports are goods and services bought in by one country from other countries

Question 8

Mention the problems of a country with higher imports than exports

Answer 8

The country may run out of foreign current and have to borrow from abroad
The price of the country’s currency will be likely to fall against other currencies.

Question 9

Definition of exchange rate

Answer 9

Exchange rate is the price of one currency in terms terms of another.

Question 10

Definition of exchange rate depreciation

Answer 10

Exchange rate depreciation is the fall in the value of a currency compared with other currencies