AnswersHSA 26-27 EconomicsThe Business Cycle

The Business Cycle Answers

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There are five stages in a recession. 1. job loss2. falling production3. falling demand (occurs twice)4. peak production In which order do these stages occur?

A
4, 3, 2, 1, 3
B
3, 2, 1, 3, 4
C
4, 3, 2, 3, 1
D
4, 2, 3, 1, 3
2
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During a recession, what is one way governments try to encourage growth?

A
by increasing unemployment benefits
B
by stopping government spending
C
by requiring firms to maintain production
D
by eliminating all tax breaks
3

Which of the following is a characteristic of prosperity in the peak phase of the business cycle?

A
stagnant prices
B
high levels of production
C
ambivalence about the economy
D
reduced incomes
4

There are four stages in an economic recovery. 1. increased production2. rising demand (occurs twice)3. increased hiring In which order do these stages occur?

A
2, 1, 2, 3
B
3, 2, 1, 2
C
2, 3, 1, 2
D
2, 1, 3, 2
5

Which of the following conditions is most indicative of recovery?

A
The economy has stopped shrinking.
B
The economy begins to peak.
C
The GDP continues to shrink.
D
The economy is growing again.
6

The graphs show the US unemployment rate and the price of whole milk between 2006 and 2012.

Question illustration
A
There is no link between prices and unemployment.
B
Rising unemployment rates drive prices higher.
C
Falling prices drive unemployment rates lower.
D
As unemployment rates rise, average prices fall.
7

Which indicators do economists use to determine the state of the economy? Choose three answers.pricesimmigration levelsagricultural outputemployment levelsgross domestic product (GDP)

A
prices
B
immigration levels
C
agricultural output
D
employment levels
E
gross domestic product (GDP)
8

Income reaches the highest level at the point of the business cycle.

Answer not available
9

This is a graph of the business cycle.Time is measured along the x-axis. What is measured along the y-axis?

Question illustration
A
employment levels
B
prices
C
economic output
D
demand
10

When production is very high but demand is very low, it can lead to

A
a recession.
B
a recovery.
C
prosperity.
D
the peak.

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