A recession in the UK officially occurs when there has been

Negative growth in GDP for successive quarters

Supply-side shocks to an economy might include all of these, except

A sudden rise in interest rates curbing consumer spending

An economy's trend growth rate...

Is arrived at by 'smoothing' GDP data over several cycles

Supply-side reasons for improved long-run growth include all of the following, except

Lower income tax that increases disposable income

The situation in the diagram is most likely to have been the result of

An increase in investment spending by firms

Short-run economic growth

Makes use of idle/unemployed resources

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Economic growth and the economic cycle

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Questions 15

Answers

1
The latest figures for 2017 UK economic growth show it to be around
1.8%
-0.6%
zero
5.1%
2
A recession in the UK officially occurs when there has been
Negative growth in GDP for successive quarters
Negative growth in GDP for 3 months
An increase in unemployment
The growth rate slows down
3
Supply-side shocks to an economy might include all of these, except
A sudden rise in interest rates curbing consumer spending
War threatening supplies of copper and tin
World oil prices spiking
A tsunami
4
An economy's trend growth rate...
Will always be around 2-3%
Can fluctuate considerably in the short-run
Is arrived at by 'smoothing' GDP data over several cycles
Is independent of supply-side improvements
5
Supply-side reasons for improved long-run growth include all of the following, except
Skilled migrants entering the economy
Lower income tax that increases disposable income
Lower income tax that incentivises people to work harder
Better training and education
6
Short-run economic growth is best illustrated by which movement?
B to D
D to B
B to E
A to C
7
Features of the boom phase of the economic cycle include all of the following, except
Consumer confidence
High and rising profits
Rising stock levels
Strong investment plans
8
Long-run economic growth is best illustrated by which movement?
B to D
D to B
A to C
B to E
9
GDP falling for 2 or more years may be referred to as any of the following, except
Recession
Prolonged trough
Slump
Depression
10
The following diagram illustrates all of the following, except
Increase in real GDP due to shifting aggregate demand
Higher price level in response to shifting aggregate demand
Likely Keynesian 'demand management' policies
Long-run economic growth
11
A positive output gap occurs when
Real GDP is below trend GDP
Real GDP is above trend GDP
12
Key reasons for economic cycles that have been seriously proposed include all of these, except
Automatic fiscal stabilisers
Speculative bubbles
Sunspot activity
Multiplier/accelerator interaction
13
Demand-side influences on growth include all of the following, except
Productivity improvements
A better trade balance (X - M)
Higher Consumption spending
Higher Government spending to stimulate AD
14
The situation in the diagram is most likely to have been the result of
Higher wage levels throughout the economy
Inward migration and higher income taxes
An increase in investment spending by firms
Better education/training and lower consumption spending
15
Short-run economic growth
Makes use of idle/unemployed resources
Involves an outward shift in the PPF
Expands the productive capacity of the economy
Involves improving the quality or quantity of factors

Economic growth and the economic cycle Flashcards | StudBud