SIE Economic Factors and Business Cycles 1

Question 1

Which of the following is considered a leading economic indicator?

Accepted Answer

Building permits issued

Answer

Average duration of unemployment

Answer

Prime interest rate

Answer

Outstanding commercial loans

Question 2

During which phase of the business cycle does unemployment typically reach its highest level?

Accepted Answer

Trough

Answer

Peak

Answer

Expansion

Answer

Recovery

Question 3

What does Gross Domestic Product (GDP) measure?

Accepted Answer

The total market value of all goods and services produced in a country during a specific period

Answer

The average income of all citizens in a country

Answer

The total amount of government debt outstanding

Answer

The rate at which consumer prices are rising

Question 4

Which of the following is a lagging economic indicator?

Accepted Answer

Average duration of unemployment

Answer

Stock market prices

Answer

Building permits

Answer

Manufacturer's new orders for consumer goods

Question 5

Stagflation is best described as a period of:

Accepted Answer

High inflation combined with high unemployment and stagnant growth

Answer

High economic growth and high inflation

Answer

Low inflation and low unemployment

Answer

Deflation and rising employment

Question 6

The Consumer Price Index (CPI) is primarily used to measure:

Accepted Answer

Changes in the price level of a basket of consumer goods and services over time

Answer

The total output of the manufacturing sector

Answer

The total value of goods and services exported by a country

Answer

The interest rate that the Federal Reserve charges member banks

Question 7

Which phase of the business cycle is characterized by rising GDP, increasing employment, and growing consumer spending?

Accepted Answer

Expansion

Answer

Contraction

Answer

Trough

Answer

Recession