Thursday, February 29, 2024

Business Cycle MCQs:

Business Cycle MCQs:


  1. Which of the following is NOT a phase of the business cycle?

    • (a) Peak
    • (b) Expansion
    • (c) Stagnation
    • (d) Trough 
    • Answer:(c) Stagnation
  2. The long-term upward trend in the economy, independent of cyclical fluctuations, is referred to as:

    • (a) Business cycle
    • (b) Secular trend
    • (c) Recession
    • (d) Inflation 
    • Answer: (b) Secular trend
  3. During which phase of the business cycle does unemployment typically reach its highest level?

    • (a) Peak
    • (b) Expansion
    • (c) Recession
    • (d) Trough
    •   Answer: (c) Recession
  4. Which of the following is an example of a lagging indicator of the business cycle?

    • (a) Stock prices
    • (b) New orders for capital goods
    • (c) Unemployment rate
    • (d) Consumer confidence index 
    • Answer: (c) Unemployment rate
  5. Government policies aimed at influencing the business cycle are collectively known as:

    • (a) Stabilization policies
    • (b) Monetary policies
    • (c) Fiscal policies
    • (d) Structural policies
    •   Answer: (a) Stabilization policies
  6. Which of the following is NOT a common cause of business cycles?

    • (a) Technological advancements
    • (b) Changes in consumer confidence
    • (c) Government spending fluctuations
    • (d) Natural disasters
    •   Answer: (d) Natural disasters (While they can impact the economy, they are not a recurring factor like the others)
  7. During a recession, all of the following are likely to DECREASE EXCEPT:

    • (a) Gross domestic product (GDP)
    • (b) Investment spending
    • (c) Unemployment rate
    • (d) Interest rates 
    • Ans: d
  8. The period between the peak and trough of a business cycle is called:

    • (a) Recession
    • (b) Expansion
    • (c) Contraction
    • (d) Depression 
    • Answer: (c) Contraction
  9. Keynesian economics argues that government spending can be used to:

    • (a) Shorten the duration of a recession.
    • (b) Extend the duration of an expansion.
    • (c) Prevent business cycles from occurring.
    • (d) None of the above. 
    • Answer: (a) Shorten the duration of a recession.