The Business Cycle

Question 1

How does the business cycle affect consumers? Check all that apply.

Revolt · Accepted Answer

It can be harder to find a job during an economic depression.; People tend to make more money during an expansion.; Prices on gas and food will tend to increase during an expansion.

Question 2

Which point marks a peak? Which point marks a trough? Which point marks a recession? Which point marks a recovery?

Revolt · Accepted Answer

2; Selection 1: 2; Selection 2: 4; Selection 3: 3; Selection 4: 5

Question 3

At which point of the business cycle would prices probably be highest?

Revolt · Accepted Answer

during a peak

Question 4

Examine this graph representing US unemployment rates. Which of these years might economists consider a trough?

Revolt · Accepted Answer

1985

Question 5

A family is trying to sell their home at point 2 on the graph.How might this affect the sale of their home? Check all that apply.

Revolt · Accepted Answer

Their home will likely sell for a low price.; Their home will likely take longer to sell.; Their home will likely increase in value if they wait.

Question 6

Imagine a shoe store has a large number of shoes in its warehouse. The store owner believes the economy has peaked and a recession is coming soon.If this is true, what should the store owner do?

Revolt · Accepted Answer

The owner should advertise a sale and sell as many shoes as possible before the recession causes prices and demand to fall. The owner should also plan for lower demand and consider ways to keep workers employed.

The Business Cycle Answers

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