Q. 1) Which two parts of the business cycle are most easily recognized or noticed? A) Recovery and peaks

B) Contraction and troughs

C) Peaks and troughs

D) Expansion and recovery

Q. 2) How many products are used to compute the Consumer Price Index?

A) 80,000

B) 20,000

C) 10,000

D) 500

Q. 3) What do economists believe cause business fluctuations?

A) business investment

B) business investment and government activity

C) business investment, government activity, and external factors

D) business investment, government activity, external factors, and psychological factors

Q. 4) How can a person figure out their disposable income?

A) Take their personal income and subtract the money they pay in taxes.

B) Take their personal income and add the money they pay in taxes.

C) Divide the national income by the number of employed persons in the United States.

D) Count up all of the money that is thrown away on frivolous purchases.

Q. 5) What is used to remove the inflation from GDP to produce the real GDP?

A) PPI

B) Depreciation

C) GDP Price deflator

D) Supercomputers

Q. 6) What type of economic indicators would be associated with the expansion or contraction phases of the business cycle?

A) Leading indicators

B) Coincident indicators

C) Lagging indicators

D) Post-indicators

Q. 7) How is Net Domestic Product different from Gross Domestic Product?

A) Net Domestic Product take inflation into account and Gross Domestic Product does not.

B) Net Domestic Product takes depreciation into consideration.

C) Gross Domestic Product values all of the goods sold within the borders of the country.

D) There is no difference between Net Domestic Product and Gross Domestic Product.

Q. 8) What type of indicator will point to the direction the economy is headed?

A) Leading indicators

B) Coincident indicators

C) Lagging indicators

D) Blinking signs

Q. 9) Which part of the business cycle is the declining stage of the business cycle?

A) Peak

B) Trough

C) Contraction

D) Expansion

Q. 10) Which of the following is NOT an example of a final good?

A) A car

B) A DVD player

C) A video card

D) A video card that is in a PC

Q. 11) When does a recession occur in the business cycle?

A) When peaks last more than 6 months

B) When contractions last more than 6 months

C) When troughs last more than 6 months

D) When expansion last more than 6 months

Q. 12) Which of the following is not used to measure the national economy?

A) Gross Domestic Product

B) National Income

C) Personal income

D) Inflation