What is a governments goal in terms of the business cycle?

It is to reduce the intensity of economic fluctuations.

What are the stages of the business cycle?

Recovery, Boom,Slump and Recession

What would you think if the business cycle showed a horizontal potential GDP line?

The economy is likely to stay the same in terms of real GDP

What is the definition of a recession.

This is where an economic contraction lasts two quarters.

What is Economic Growth?

An increase in the real output of an economy over time.

What is the definition of the output gap?

It is simply actual GDP minus potential GDP.

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The Business Cycle Unit 38 Btec Business

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Standard Level Business Studies second year Btec Unit 38

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Questions 10

Answers

1
What is a governments goal in terms of the business cycle?
To make the trend rate upwards instead of downwards
To ensure there is no unemployment ever.
To get the economy into a peak or boom phase.
It is to reduce the intensity of economic fluctuations.
2
Which phase is the business cycle in when there is widespread unemployment?
A boom
A recovery
A trough
A peak
3
Which stage of the business cycle is the economy in when there is falling real GDP?
A contracion
A strong recovery
A recession
A boom
4
What does a peak mark the end of?
No jobs being available
A boom
A recovery
An upturn
5
What are the stages of the business cycle?
long term growth trend or potential GDP
Recovery, Boom,Slump and Recession
Extension, recession, boom and trough
6
What would you think if the business cycle showed a horizontal potential GDP line?
The economy will not improve
The economy is likely to stay the same in terms of real GDP
The economy will need some expansionary policies.
The Prime Minister needs to make this a focus .
7
What is the definition of a recession.
It is when the country runs out of medicine and school books
This is where an economic contraction lasts two quarters.
It is the same situation as Greece and Spain.
it is negative GDP
8
What is Economic Growth?
It is when the value of the country's goods are up.
It is when people work really hard and firms make profit.
An increase in the real output of an economy over time.
It is when there are mining projects and people buy more.
9
What is the definition of the output gap?
It is when actual GDP lies above potential GDP.
It is simply actual GDP minus potential GDP.
It is where the economy produces too much.
It is when the economy does not produce enough.
10
What is another name for 'potential' GDP?
Full employment GDP
If only GDP
What could-be GDP.
Productive possibility GDP

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