unit 6.1

Question 1

business cycle

Answer 1

• growth(GDP rises, unemployment is falling and the country is enjoying higher living standards. At this time businesses do well)
• boom( Caused by too much spending. Prices start to rise quickly and there will be shortages of skilled workers. Business costs rising and firms will become uncertain about future.
• recession( too little spending. Period when GDP actually falls. Most businesses will experience falling demand and profits, workers may lose their jobs)
• slump( long-drawn out recession, Unemployment will reach high levels and prices may fall.
• growth
• boom

Question 2

low unemployment(when people want to work but can’t find a job) NOT DOMNE

Answer 2

• unemployed people do not produce any goods or services–total level of output in country lower that could be.
• government pays unemployment benefit to those without jobs

Question 3

government economic policy

Answer 3

fiscal policy- Any change by the government in taxes or government/public speaking

monetary policy- changes in interest rates

supply side policy- government attempts to increase productivity and increase efficiency in the economy. Methods to increase supply or production in an economy