Which of the following would most likely occur during the expansionary phase of the business cycle inflation?

Which one of the following is incorrect regarding money?

The value of money is related to the quantity of money in circulation.
The value of money is dependent on the quantity of gold held by the Federal Reserve.
Money is a medium of exchange.
Money serves as a unit of account.
Money is a store of wealth.

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Which if the following would most likely occur during the expansionary phase of the business cycle?
What happens during expansionary phase of the business cycle?
What happens to inflation during expansionary phase?
Which of the following typically occurs during an expansionary phase of a business cycle quizlet?

Which of the following will most likely result from an unanticipated decrease in aggregate supply due to unfavorable weather conditions in agricultural areas?

a decrease in prices
an increase in prices
a decrease in inflation
a decrease in unemployment
an increase in the natural unemployment

The Central Bank decides to have the money supply increase by exactly 5% each year. Which of the following statements would be false?

This policy is considered non-activist monetary policy.
This policy may spur growth in the short-term, but will have no impact on real income in the long-run.
The 5% increase is known as a policy rule.
None of these answers is correct.
Following this policy will require the Central Bank to adjust the amount of new currency injected into the economy based on feedback data.
Assuming production remains constant, inflation will be about 5% each year.

If the inflation rate is 3.5%, how much will a basket of goods that currently costs $25 cost in 50 years?

$98.23
$111.39
$139.62
$225.00
$43.75

If a recession is about to begin, the Keynesian view indicates that policy makers should

decrease government spending while holding taxes constant.
increase government spending not increase taxes.
balance the budget.
hold government spending constant and increase taxes.

A nation has recently emerged from several years of war, in which the government used debt to support the war effort without raising taxes. Which of the following economic problems is this nation most likely facing?

stagflation
deflation
unemployment
inflation
over regulation

Which of the following is/are accomplished by automatic stabilizers?
I. In a recession, they cause a greater budget deficit than would prevail in their absence.
II. In a recession, they cause a greater budget surplus than would prevail in their absence.
III. In a boom, they cause a greater budget deficit than would prevail in their absence.
IV. In a boom, they cause a greater budget surplus than would prevail in their absence.

II & IV
I & III
I & IV
II & III

Which of the following will most likely occur during the expansionary phase of a business cycle?

Interest rates rise and the number of housing starts declines.
GDP rises sharply and unemployment falls.
Real GDP declines and inflation rises sharply.
inflation rises and employment falls.

Which of the following will lead to an increase in aggregate demand in the U.S. ?

a decrease in wealth due to a stock market crash
a decrease in the real interest rate
an increase in the probability of a recession
an increase in the real interest rate
a decline in real income in Japan and Western Europe

In year 0, $10 could purchase a certain basket of goods. In year 5, the identical basket of goods cost $13. What was the average annualized inflation rate during this period?

Which of the following would increase both GDP and GNP?

the sale of a good produced by a foreign citizen who lives in another country
the sale of a good produced by a domestic citizen who lives in the U.S.
the sale of a good produced by a foreign citizen who lives in the U.S.
the sale of a good produced by a domestic citizen who lives in another country

Which one of the following would add to this year's GDP?

a professor's $1,000 tax-deductible gift to her college
your purchase of 100 shares of IBM stock
rent you fail to make to Budget Rent-A-Car because you filed for bankruptcy
your purchase of a five-year-old house from its original owner
the value of lawn services a 16-year-old reports as income to the government

Which of the following items is NOT used in calculating the GDP using the Resources Cost-income approach?

Income payments to resources.
Compensation of employees.
Government gross investment.
Rents, interest income and profits.

"The velocity of money is not affected by money supply." This view is held by:

Keynesians.
Classical economists.
Monetarists.
Neoclassical economists.

Commercial depository institutions and the federal government are the only customers of ________.

Federal Reserve Banks
credit unions
the FDIC
savings and loans
commercial banks

Which of the following conditions would be necessary for spending increases to be an effective fiscal policy measure?
I. The government percentage of GDP is unusually high
II. The spending increases are offset by tax hikes
III. The legislation can be enacted and implemented well in advance of problematic unemployment
IV. GDP is currently below potential GDP

I, III
III only
I, IV
I, II, III, IV
II only
IV only

The government budget deficit is currently at 600 billion dollars. The government is following:

a restrictive fiscal policy.
a discretionary fiscal policy.
cannot be determined.
an expansionary fiscal policy.

The fact that consumption demand is stable over the business cycle and that changes in real interest rates help redirect economic fluctuations can both be cited as evidence that

price adjustments in the resource market will destabilize the economy.
market forces tend to cushion the effects of an economic shock.
discretionary fiscal policy will improve the performance of the economy.
market economies are inherently unstable.

Some households and firms hold money balances so they can respond quickly to profit-making opportunities. This reason for holding money is known as

investment demand.
precautionary demand.
transaction demand.
speculative demand.

Which of the following would be officially classified as unemployed?

a mathematician who returned to graduate school after failing to find a job the last four months
a 60-year-old former steel worker who would like to work but has given up actively seeking employment
none of these answers would be officially classified as unemployed
a school administrator who has been working as a substitute teacher one day per week while looking for a full-time job in administration

Which if the following would most likely occur during the expansionary phase of the business cycle?

Which of the following will most likely occur during the expansionary phase of a business cycle? Real GDP rises, and unemployment falls.

What happens during expansionary phase of the business cycle?

In the expansionary phase, the economy experiences growth over two or more consecutive quarters. Interest rates are typically lower, employment rates rise, and consumer confidence strengthens. The peak phase occurs when the economy reaches its maximum productive output, signalling the end of the expansion.

What happens to inflation during expansionary phase?

Inflation decreases during recessions and increases during expansions (recoveries).

Which of the following typically occurs during an expansionary phase of a business cycle quizlet?

Terms in this set (57) which of the following typically occurs during an expansionary phase of a business cycle? employment increases.

Which of the following would most likely occur during the expansionary phase of the business cycle inflation?

Which if the following would most likely occur during the expansionary phase of the business cycle?

What happens during expansionary phase of the business cycle?

What happens to inflation during expansionary phase?

Which of the following typically occurs during an expansionary phase of a business cycle quizlet?

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