Knowledge Check Week 4 Study Guide
Concepts

Mastery

Score: 10 / 10

Questions

Stages in the Business
100%

1

Level of Economic Growth

100%

4

Level of Unemployment

100%

Inflation

100%

Cycle

2

3

5

6

7

9

10

8

Concept: Stages in the Business Cycle
Mastery

100%

1.
Business cycles occur when output

Questions

1

2

3

A.

falls below its potential

B.

rises above its potential

C.

is fixed at its potential

D.

fluctuates around its growth trend

Correct:
The Correct Answer is: D.
The business cycle includes the tendency for output to rise and fall in the short term.
When output fluctuates around an economy’s secular trend, business cycles occur.
2.
Which of these statements best describes a complete individual business cycle?

A.

Movement from peak to trough to peak

B.

Movement from recession to expansion

C.

Movement from peak to recession to trough

D.

Movement from trough to expansion then to peak

Correct:
The Correct Answer is: A.
A business cycle is measured peak to peak or trough to trough.
3.
During the business cycle, the period between the point at which output reaches a high and the point at which it reaches a low is called

A.

a peak

B.

a trough

C.

an expansion

D.

a recession

Correct:
The Correct Answer is: D.
A downturn describes the phenomenon of economic activity starting to fall from a peak. If output contracts between the point at which output reaches a high and the point at which it reaches a low for more than two consecutive quarters, the economy is generally considered to be in a recession.

Concept: Level of Economic Growth
Mastery

100%

Questions

4

4.
Which of the following equals the market value of all final goods and services produced in an economy, stated in the