This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Business Cycles > Business Cycles – Quiz 3 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Business Cycles Quiz 3 (30 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) Reducing government spending. B) Raising reserve requirements. C) Raising interest rates. D) Selling securities on the open market. Show Answer Correct Answer: A) Reducing government spending. 2. Expectant parents buy supplies for the nursery. Would this be included in GDP? A) Yes-Investment. B) No-Intermediate goods. C) No-Non-market activity. D) Yes-Consumer Spending. Show Answer Correct Answer: D) Yes-Consumer Spending. 3. Which component of GDP? The construction of a new house. A) Investment (in physical capital). B) Net Exports. C) Consumption. D) Government spending. Show Answer Correct Answer: A) Investment (in physical capital). 4. Authority is shared between two supervisors in which of the following types of business structures? A) Employee-based structure. B) Divisional structure. C) Customer-based structure. D) Matrix organization. Show Answer Correct Answer: D) Matrix organization. 5. Who first identified cyclial patterns in the economy and created what is often referred to as "the business cycle" ? A) Warren Buffett. B) Steven Jobs. C) George Washington. D) Clemente Juglar. Show Answer Correct Answer: D) 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) Employee-based structure. B) Team-based structure. C) Divisional structure. D) Productivity structure. Show Answer Correct Answer: B) 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) Informal. B) Learning. C) Staff. D) Matrix. Show Answer Correct Answer: A) Informal. 9. What effect does inflation have on the purchasing power of money? A) Inflation has a positive effect on interest rates, which raises the value of the dollar. B) Inflation has a negative effect on purchasing power because the value of the dollar increases. C) Inflation has a positive effect on purchasing power because there is an increase in the value of the dollar. D) Inflation has a negative effect on purchasing power because the value of the dollar decreases. Show Answer Correct Answer: D) 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) Recovery. B) Prosperity. C) Recession. D) Expansion. Show Answer Correct Answer: C) Recession. 13. If sales rise, businesses may reduce the workforce to help reduce their overall costs. A) FALSE. B) TRUE. Show Answer Correct Answer: A) FALSE. 14. What is the correct order for the business cycle? A) Expansion, Peak, Trough, Contraction. B) Expansion, Trough, Contraction, Peak. C) Expansion, Peak, Contraction, Trough. D) Expansion, Contraction, Peak, Trough. Show Answer Correct Answer: C) 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) Weakness. C) Opportunity. D) Threat. Show Answer Correct Answer: B) Weakness. 16. Which stage of the design thinking process involves learning about customers' challenges? A) Empathize. B) Define. C) Ideate. D) Prototype. Show Answer Correct Answer: A) 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) Net Exports. C) Government spending. D) Investment (in physical capital). 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. 21. Which component of GDP? I pay my accountant $ 175 to file my tax paperwork. A) Consumption. B) Net Exports. C) Investment (in physical capital). D) Government spending. Show Answer Correct Answer: A) Consumption. 22. During which phase of the business cycle does the economy experience high unemployment and low consumer spending? A) Expansion. B) Boom. C) Peak. D) Recession. Show Answer Correct Answer: D) Recession. 23. In which stage is a Minimum Viable Product (MVP) created? A) Prototype. B) Traction. C) Launch. D) Idea. E) Growth. Show Answer Correct Answer: A) Prototype. 24. During which stage of the design thinking process will the design team create multiple inexpensive product versions? A) Prototype. B) Ideate. C) Define. D) Empathize. Show Answer Correct Answer: A) Prototype. 25. Which of the following occurs when decisions are made by the individuals who are the closest to the problem? A) Decentralization. B) Supervision. C) Centralization. D) Authorization. Show Answer Correct Answer: A) Decentralization. 26. Increase in the key measurements of aggregate economic activities such as employment, sales and income resulting in a rise in productivity; also known as expansion or recovery A) Peak. B) Business Cycle. C) Recession. D) Growth. Show Answer Correct Answer: D) Growth. 27. Sum or whole amount of something A) Aggregate. B) Growth. C) Business Cycle. D) Trough. Show Answer Correct Answer: A) Aggregate. 28. What type of unemployment occurs during a transition period from one job to another job? A) Seasonal. B) Structural. C) Frictional. D) Cyclical. Show Answer Correct Answer: C) Frictional. 29. What is the remuneration received by the factor of production entrepreneurship? A) Profit. B) Interest. C) Rent. D) Wages and salaries . Show Answer Correct Answer: A) Profit. 30. Discuss the impact of inflation on businesses during the expansion phase of the business cycle. A) Inflation has no impact on businesses during the expansion phase. B) Inflation leads to reduced costs and increased purchasing power for businesses. C) Inflation only affects consumers, not businesses. D) Inflation can lead to increased costs and reduced purchasing power for businesses. Show Answer Correct Answer: D) Inflation can lead to increased costs and reduced purchasing power for businesses. ← PreviousNext →Related QuizzesMacroeconomics QuizzesEconomics QuizzesBusiness Cycles Quiz 1Business Cycles Quiz 2Business Cycles Quiz 4Business Cycles Quiz 5Business Cycles Quiz 6Business Cycles Quiz 7Business Cycles Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books