This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Business Cycles > Business Cycles – Quiz 4 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Business Cycles Quiz 4 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. If and economy experiences a dramatic rise in prices, which fiscal policy action could be taken? A) Selling securities on the open market. B) Raising interest rates. C) Reducing government spending. D) Raising reserve requirements. Show Answer Correct Answer: C) Reducing government spending. 2. Expectant parents buy supplies for the nursery. Would this be included in GDP? A) Yes-Consumer Spending. B) Yes-Investment. C) No-Intermediate goods. D) No-Non-market activity. Show Answer Correct Answer: A) Yes-Consumer Spending. 3. Which component of GDP? The construction of a new house. A) Consumption. B) Government spending. C) Investment (in physical capital). D) Net Exports. Show Answer Correct Answer: C) Investment (in physical capital). 4. Authority is shared between two supervisors in which of the following types of business structures? A) Matrix organization. B) Divisional structure. C) Employee-based structure. D) Customer-based structure. Show Answer Correct Answer: A) Matrix organization. 5. Who first identified cyclial patterns in the economy and created what is often referred to as "the business cycle" ? A) George Washington. B) Clemente Juglar. C) Warren Buffett. D) Steven Jobs. Show Answer Correct Answer: B) Clemente Juglar. 6. Which of the following types of business structures consists entirely of work groups and teams which perform an organization's work? A) Productivity structure. B) Divisional structure. C) Employee-based structure. D) Team-based structure. Show Answer Correct Answer: D) Team-based structure. 7. Calculated in GDP? The government's purchase of a new drone for the Air Force. A) Yes. B) No. Show Answer Correct Answer: A) Yes. 8. ..... structures are laid-back and undefined. A) Matrix. B) Learning. C) Informal. D) Staff. Show Answer Correct Answer: C) Informal. 9. What effect does inflation have on the purchasing power of money? A) Inflation has a positive effect on purchasing power because there is an increase in the value of the dollar. B) Inflation has a positive effect on interest rates, which raises the value of the dollar. C) Inflation has a negative effect on purchasing power because the value of the dollar decreases. D) Inflation has a negative effect on purchasing power because the value of the dollar increases. Show Answer Correct Answer: C) Inflation has a negative effect on purchasing power because the value of the dollar decreases. 10. A reccsion is what? A) A Contraction lasting two or more quarters. B) Stage 1. C) Stagnation of business activity and inflation of prices. D) An extended period of high unemployment and limited business activity. Show Answer Correct Answer: A) A Contraction lasting two or more quarters. 11. Explain the concept of expansion in the business cycle. A) Expansion in the business cycle refers to the phase of increasing economic activity, rising employment, and growing consumer spending. B) Expansion is the phase of the business cycle where there is a decrease in employment and consumer spending. C) Expansion in the business cycle means stagnant employment and no growth in economic activity. D) Expansion refers to the phase of decreasing economic activity and declining consumer spending. Show Answer Correct Answer: A) Expansion in the business cycle refers to the phase of increasing economic activity, rising employment, and growing consumer spending. 12. Increasing unemployment and decreasing GDP is a sign of what part of the Business Cycle? A) Expansion. B) Recovery. C) Prosperity. D) Recession. Show Answer Correct Answer: D) Recession. 13. If sales rise, businesses may reduce the workforce to help reduce their overall costs. A) TRUE. B) FALSE. Show Answer Correct Answer: B) FALSE. 14. What is the correct order for the business cycle? A) Expansion, Peak, Contraction, Trough. B) Expansion, Contraction, Peak, Trough. C) Expansion, Trough, Contraction, Peak. D) Expansion, Peak, Trough, Contraction. Show Answer Correct Answer: A) Expansion, Peak, Contraction, Trough. 15. Tom runs a car repair shop with dependable employees. Recently he has seen an increase in customers needing work done. He knows that he needs to replace one of the lift machines but is struggling to finance it. There are other repair shops in the neighborhood. Identify the SWOT analysis element below:Small budget A) Strength. B) Opportunity. C) Threat. D) Weakness. Show Answer Correct Answer: D) Weakness. 16. Which stage of the design thinking process involves learning about customers' challenges? A) Ideate. B) Define. C) Prototype. D) Empathize. Show Answer Correct Answer: D) Empathize. 17. Explain the concept of business confidence and its relationship with the business cycle. A) Business confidence is the level of trust in the government's economic policies. B) Business confidence is the level of optimism or pessimism that business owners and managers have about the performance and future prospects of their companies. It is closely related to the business cycle as high confidence can lead to increased investment and expansion during the expansion phase of the cycle, while low confidence can result in reduced investment and contraction during the contraction phase. C) Business confidence has no impact on the business cycle. D) Business confidence is only relevant for small businesses. Show Answer Correct Answer: B) Business confidence is the level of optimism or pessimism that business owners and managers have about the performance and future prospects of their companies. It is closely related to the business cycle as high confidence can lead to increased investment and expansion during the expansion phase of the cycle, while low confidence can result in reduced investment and contraction during the contraction phase. 18. The business cycle directly measures which economic goal? A) Full employment. B) Growth. C) Price stability. D) None of above. Show Answer Correct Answer: B) Growth. 19. Which component of GDP? A calculator purchased by a college student for taking exams. A) Consumption. B) Government spending. C) Investment (in physical capital). D) Net Exports. Show Answer Correct Answer: A) Consumption. 20. Which cause of inflation suggests that people wanting more goods and services than are available will increase prices? A) Quantity Theory. B) Cost-Push Theory. C) Demand-Pull Theory. D) Demand-Push Theory. Show Answer Correct Answer: C) Demand-Pull Theory. ← PreviousNext →Related QuizzesMacroeconomics QuizzesEconomics QuizzesBusiness Cycles Quiz 1Business Cycles Quiz 2Business Cycles Quiz 3Business Cycles Quiz 5Business Cycles Quiz 6Business Cycles Quiz 7Business Cycles Quiz 8Business Cycles Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books