Test 2- Business cycle

Question 1

3 Goals of Macro (gov)

Answer 1

GDP Growth
Low unemployment
stable prices (low & stable inflation)

Question 2

Low unemployment
spending & confidence are high

Answer 2

Peak

Question 3

GDP contracts
unemployment goes up
spending falls

Answer 3

Trough (recession)

Question 4

A recession is _________ of falling ______

Answer 4

6 months
GDP

Question 5

4 Phases of a business cycle

Answer 5

Peak
Recession
trough
Recovery

Question 6

when current output is less than potential output, the economy must be going through?

Answer 6

cyclical unemployment

Question 7

the sahm rule focuses on what 2 things?

Answer 7

unemployment & stimulus spending

Question 8

A prolonged period of economic time, a very long recession.
severe & long recessions
(high unemployment & deep contractions)

Answer 8

depression

Question 9

on the business cycle Y is

on the business cycle X is

Answer 9

Real GDP

Time (years)

Question 10

the positive output gap shows?

the negative output gap shows?

Answer 10

Inflation

unemployment

Question 11

A period of:
economic expansion

economic contraction

Answer 11

Boom (upturn)

Bum (downturn)

Question 12

the straight line going up is called?

Answer 12

growth trend line