Question 1
What is meant by trade cycle?
A.
Fluctuations in real GDP around trend growth. B.
Slowing growth and rising unemployment. C.
Policy that dampens the cycle. D.
Return to positive growth after downturn.
Question 2
What is meant by automatic stabilisers?
A.
Policy that dampens the cycle. B.
Taxes and benefits that cushion cycles. C.
Slowing growth and rising unemployment. D.
Two consecutive quarters of negative growth.
Question 3
During a boom AD tends to:
A.
Be very low B.
Equal zero C.
Ignore consumption D.
Be high with inflationary pressure
Question 4
A recession is defined as:
A.
One month of falling prices B.
Rising exports only C.
Any trade deficit D.
Two consecutive quarters of negative growth
Question 5
Investment is typically:
A.
Countercyclical always B.
Fixed by government C.
Unrelated to GDP D.
Procyclical
Question 6
Automatic stabilisers:
A.
Ban imports B.
Fix exchange rates C.
Reduce the amplitude of the trade cycle D.
Eliminate all taxation
Question 7
What is meant by confidence?
A.
Rapid growth, high confidence, rising inflation pressure. B.
Policy that dampens the cycle. C.
Animal spirits amplify cycles. D.
Taxes and benefits that cushion cycles.
Question 8
What is meant by countercyclical policy?
A.
Taxes and benefits that cushion cycles. B.
Move with GDP — investment, profits. C.
Policy that dampens the cycle. D.
Return to positive growth after downturn.
Question 9
What is meant by boom?
A.
Rapid growth, high confidence, rising inflation pressure. B.
Move with GDP — investment, profits. C.
Two consecutive quarters of negative growth. D.
Animal spirits amplify cycles.
Question 10
What is meant by recession?
A.
Animal spirits amplify cycles. B.
Two consecutive quarters of negative growth. C.
Rapid growth, high confidence, rising inflation pressure. D.
Taxes and benefits that cushion cycles.
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