EPF - E.2.1-E.2.2

In the long run, the business cycle has a generally __________ trend because of economic growth.

• Upward-sloping

• Downward-sloping

Which of the following is the most characteristic of an economy in the recession phase of the business cycle?

• Low unemployment

• Hyperinflation concerns

• Decreasing price-level

On the graph, if the economy moved from a trough to a peak, which of the following statements would be true?

• Unemployment would be increasing and GDP would be decreasing

• Unemployment would be decreasing and GDP would be decreasing

• Unemployment would not change and GDP would be decreasing

• Unemployment would be increasing and GDP would be increasing

• Unemployment would be decreasing and GDP would be increasing

Which of these statements accurately characterizes the role of the government in the circular flow model?

• The government buys factors of production from households and lends money to the financial sector

• The government purchases imports from foreign countries and makes transfer payments to households

• The government collects taxes from households and firms and makes transfer payments to households

• The government collects taxes from firms and lends money to the financial sector

Which of the following goods and services would be counted in American GDP?

• A cellphone that was made in China and sold in the United States.

• A bulldozer that was made in America and solde in Canada.

• Metal that was mined in the United States and sold to an American car company to be turned into cars.

• Illegal drugs sold on the black market.

• The value of housework done by a stay-at-home dad.