Fundamentals Of Economics 6th Edition By William Boyes – Test Bank

Chapter 11—Unemployment, Inflation, and Business Cycles

MULTIPLE CHOICE

1. At any time, job opportunities depend on all of the following except
a. the individual’s ability.
b. the individual’s experience.
c. the current state of the economy.
d. the individual’s level of education.
e. all of these determine job opportunities.

ANS: E PTS: 1 DIF: Easy
NAT: BPROG: Reflective Thinking TOP: Preview KEY: BLOOM’S: Knowledge

2. During the Great Depression in the 1930s, all of the following were characteristic of the economy except
a. about one in four workers was out of work.
b. a large number of firms had laid off workers or gone out of business.
c. consumer prices rose.
d. national output fell 25%.
e. none  all of these were characteristic of the economy during the Great Depression.

ANS: C PTS: 1 DIF: Moderate
NAT: BPROG: Reflective Thinking TOP: Business Cycles
KEY: BLOOM’S: Knowledge

3. The most widely used measure of a nation’s output is
a. CPI
b. NNP
c. GNP
d. GDP
e. NI

ANS: D PTS: 1 DIF: Easy
NAT: BPROG: Reflective Thinking TOP: Business Cycles
KEY: BLOOM’S: Knowledge

4. The two most important aspects of business cycles are changes in
a. business profits and the money supply.
b. unemployment and inflation.
c. monopolies and the international sector.
d. the price system and the foreign exchange market.
e. inflation and fiscal policy.

ANS: B PTS: 1 DIF: Easy
NAT: BPROG: Reflective Thinking TOP: Preview KEY: BLOOM’S: Knowledge

5. A business cycle refers to
a. fluctuations in the level of corporate profits.
b. seasonal unemployment patterns.
c. the ups and downs of real GDP.
d. changes in the long-term growth pattern of the CPI.
e. fluctuations in the general price level.

ANS: C PTS: 1 DIF: Easy
NAT: BPROG: Reflective Thinking TOP: Business Cycles
KEY: BLOOM’S: Knowledge

6. Business cycles are
a. variations in the economy that are all equal in intensity.
b. seasonal variations in the economy that occur every year.
c. fluctuations in economic output that show a declining growth pattern over time.
d. periodic but irregular variations in economic activity.
e. exactly alike in the amount of time that passes from peak to peak.

ANS: D PTS: 1 DIF: Moderate
NAT: BPROG: Reflective Thinking TOP: Business Cycles
KEY: BLOOM’S: Comprehension

7. In the business cycle, a trough marks the end of a(n) ____ and the beginning of a new ____.
a. contraction; expansion
b. peak; expansion
c. expansion; contraction
d. peak; contraction
e. expansion; peak

ANS: A PTS: 1 DIF: Easy
NAT: BPROG: Reflective Thinking TOP: Business Cycles
KEY: BLOOM’S: Knowledge

8. Economists call a severe prolonged economic recession a
a. slump.
b. depression.
c. stagnation.
d. trend.
e. contraction.

ANS: B PTS: 1 DIF: Easy
NAT: BPROG: Reflective Thinking TOP: Business Cycles
KEY: BLOOM’S: Knowledge

9. The part of a business cycle that follows a trough is the
a. contractionary phase of the cycle.
b. breakeven point of the cycle.
c. peak period of the cycle.
d. recessionary phase of the cycle.
e. expansionary phase of the cycle.

ANS: E PTS: 1 DIF: Easy
NAT: BPROG: Reflective Thinking TOP: Business Cycles
KEY: BLOOM’S: Knowledge

10. The period between a peak and a trough is known as a(n)
a. boom.
b. recovery.
c. expansion.
d. business cycle.
e. contraction.

ANS: E PTS: 1 DIF: Easy
NAT: BPROG: Reflective Thinking TOP: Business Cycles
KEY: BLOOM’S: Knowledge