Title: Stages of an Economy
Course: Demo 1

Q: Economy-wide fluctuations in production, trade, and economic activity are known as:
- business cycles.
- a source of recurring unemployment.
- inflation.
A: business cycles.; a source of recurring unemployment.

Q: The unemployment rate generally ________ during contractions and ________ during expansions.
- falls : rises
- rises : rises
- rises : falls
A: rises : falls

Q: A business cycle reflects changes in economic activity, particularly real GDP. The phases of a business cycle, in order, are:
- contraction, recession, expansion and boom.
- expansion, trough, contraction and peak.
- trough, expansion, recession and peak.
- expansion, peak, contraction and trough.
A: expansion, peak, contraction and trough.

Q: Which of the following describes a business cycle?
- Inflation sometimes, but not others
- Periods of increasing and decreasing real GDP
- Regular growth rate of consumer spending
A: Inflation sometimes, but not others; Periods of increasing and decreasing real GDP

Q: The point of a business cycle fluctuation during which growth slows, unemployment increases, and pricing pressures subside is called a(n):
- peak.
- expansion.
- contraction.
A: contraction.

Q: Businesses are most likely to hire new employees during which stage of the economic cycle?
- contraction
- trough
- expansion
A: expansion

Q: During an economic ________, business is booming, prices are high, and it is difficult to hire new workers because virtually everyone is already employed.
- contraction
- trough
- peak
A: peak