Multiple Choice
Identify the
choice that best completes the statement or answers the question.
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1.
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Economic fluctuations (or business cycles)
a. | are changes in the number of businesses started | b. | are fluctuations in
the Dow Jones industrial average relative to a long-term growth trend | c. | look at the role of
business in the hiring resources | d. | are fluctuations in the level of economic
activity, particularly real GDP, relative to a long-term growth trend | e. | are changes in
government spending that occur over a period of years |
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2.
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Which of the following is not true about recessions?
a. | They are milder than depressions. | b. | They are very short, typically lasting less
than 4 months on average. | c. | They typically are shorter than periods of
expansion. | d. | They begin at the peak of the cyle when the economy stops
growing. | e. | They continue until the economy reaches a trough. |
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3.
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The period between a trough in the business cycle and the subsequent peak
a. | is the trend around which the economy cycles | b. | is called a
recession | c. | could be deflationary period if the trough were deep enough | d. | is termed the
"downswing" period of the business cycle | e. | is generally longer than the period between a
peak and the subsequent trough |
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4.
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A period of sustained decline of output in the economy is known as a(n)
a. | expansion | b. | growth phase | c. | peak | d. | trough | e. | contraction |
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