5.01-2

Which is an economic condition that consumer spending usually measures?

• competition
• depreciation
• employment
• infrastructure

Which is a factor that measures the condition of the economy?

• fiscal policy
• profit margin
• price stability
• financial cycle

When interest rates continue to increase to a high level, the economy might experience a/an:

• expansion.
• liability.
• recession.
• shortage.

When consumer purchasing power decreases, the economy will experience a period of:

• containment.
• contraction.
• emergence.
• expansion.

Sales are falling off, production and employment are in decline, and the general feeling among businesspeople is that times are bad. This information indicates that the business cycle is in which phase?

• contraction
• expansion
• inflation
• peak

Businesses purchasing items for resale are exempt from sales tax. This helps to prevent what problem when measuring the GDP?

• double counting
• recording bartering
• underground economy
• secondhand transactions

Which are used in the calculation of the gross domestic product?

• land titles
• net exports
• projected expenses
• intermediate goods

If a bank doubles its interest rates on loans, the demand for money will:

• triple.
• decrease.
• remain the same.
• continue to increase.

A large number of underemployed workers indicates a problem in the economy, because underemployment means that:

• many people have stopped looking for work.
• there are insufficient jobs for qualified people.
• seasonal employees work only part of the year.
• some employees are taking time off between jobs.

Interest rates that rise and fall by a wide range on a regular basis often are an indication of:

• seasonal unemployment.
• economic instability.
• price equilibrium.
• flexible capital.