Question:

Okun’s law related with :

A.

unemployment and growth rate

B.

inflation and growth rate

C.

wage lose

D.

none

Answer» a. unemployment and growth rate

Question:

Increase in Government expenditure shift IS curve to:

A.

right

B.

left

C.

no change

D.

any of these.

Answer» a. right

Question:

Great Depression was between ……and …….

A.

1929,1939

B.

1930,1950

C.

1928,1930

D.

1930,1940

Answer» d. 1930,1940

Question:

When aggregate economic activity is declining, the economy is said to be in:

A.

a contraction.

B.

an expansion.

C.

a trough.

D.

a turning point.

Answer» a. a contraction.

Question:

What are the two main components of business cycle theories?

A.

a description of shocks and a model of how the economy responds to them

B.

a model of how people decide to spend and a description of the government’s role in the economy

C.

a model of how equilibrium is reached and a description of the government’s role in the economy

D.

a description of shocks and a description of the government’s role in the economy

Answer» a. a description of shocks and a model of how the economy responds to them

Question:

The turning points of the business cycle are

A.

expansion and peak

B.

peak and contraction

C.

contraction and trough

D.

peak and trough

Answer» d. peak and trough

Question:

When too much money chases too few goods, the resulting Inflation is called:

A.

deflation

B.

demand-pull inflation

C.

cost push inflation

D.

stagflation

Answer» b. demand-pull inflation

Question:

The great depression was caused by what major event?

A.

an increase in federal spending

B.

the stock market crash

C.

automobile workers going on strike

D.

president hoover announcing a war

Answer» b. the stock market crash

Question:

Expansion phase all but one of the following characteristics.

A.

increase in national output

B.

increase in consumer spending

C.

excess production capacity of industries

D.

expansion of bank credit

Answer» c. excess production capacity of industries

Question:

The economy is said to be overheated at the _ phase of business cycle.

A.

expansion

B.

peak

C.

contraction

D.

depression

Answer» b. peak