What is an agreement to liberalize free trade by reducing tariffs among Canada, Mexico, and the US? World Trade Organization (WTO) Trans-Pacific Partnership (TPP) European Union (EU) North American Free Trade Agreement (NAFTA)

North American Free Trade Agreement (NAFTA)

What are the four phases of a business cycle? Expansion, peak, decline, recovery Peak, contraction, trough, expansion Growth, decline, recovery, recession Boom, bust, recovery, stagnation

Peak, contraction, trough, expansion

What is the rule of thumb for classifying an economic expansion or contraction? A year of stable inflation rates Three consecutive months of rising or declining employment Two consecutive quarters of rising or declining real GDP One quarter of rising or declining real GDP

Two consecutive quarters of rising or declining real GDP

What is the relationship between consumption and investment during the business cycle? Investment changes by a larger proportion than consumption Consumption changes by a larger proportion than investment Both consumption and investment change equally Neither consumption nor investment change significantly

Investment changes by a larger proportion than consumption

How does the unemployment rate behave during recessions and expansions? Unemployment fluctuates randomly during both phases Unemployment falls during recessions and rises during expansions Unemployment remains constant during both phases Unemployment rises during recessions and falls during expansions

Unemployment rises during recessions and falls during expansions

What does Okun's law illustrate about the relationship between unemployment and real GDP? A slight change in unemployment leads to a large change in real GDP Real GDP changes independently of unemployment A greater change in unemployment is needed for a slight change in real GDP Unemployment and real GDP are unrelated

A greater change in unemployment is needed for a slight change in real GDP

What is the formula for Okun's law? \[ \% \Delta RGDP = 3\% + 2(\Delta \text{Unemployment Rate}) \] \[ \% \Delta RGDP = 2\% - 3(\Delta \text{Unemployment Rate}) \] \[ \% \Delta RGDP = 3\% - 2(\Delta \text{Unemployment Rate}) \] \[ \% \Delta RGDP = 2\% + 3(\Delta \text{Unemployment Rate}) \]

\[ \% \Delta RGDP = 3\% - 2(\Delta \text{Unemployment Rate}) \]

What is an economic model used for in the context of economic forecasting? To predict stock market trends To determine government policy effectiveness To analyze historical economic data To describe how the economy is expected to perform in the near future

To describe how the economy is expected to perform in the near future

What is the depression scrip in the context of stock market indices? A form of currency used during economic depressions A tool for predicting economic downturns An index of 30 representative stocks used to monitor price changes A measure of economic growth

An index of 30 representative stocks used to monitor price changes

When does a business cycle begin according to economic theory? When the economy reaches a peak and starts to decline When unemployment rates decrease When inflation rates stabilize When the economy reaches a low and begins to climb out of a recession

When the economy reaches a low and begins to climb out of a recession

What event in 2006-07 significantly impacted consumer buying power and contributed to the Great Recession? The bursting of the housing bubble The increase in interest rates The rise in oil prices The decline in manufacturing jobs

The bursting of the housing bubble

Which of the following statements best defines the first phase of a business cycle? A period of economic stability A period in which real GDP declines for at least two quarters in a row A period of high inflation A period of rapid economic growth

A period in which real GDP declines for at least two quarters in a row

What was the primary purpose of creating the Federal Deposit Insurance Corporation (FDIC)? To manage national debt To provide modest bank insurance for depositors To regulate interest rates To control inflation

To provide modest bank insurance for depositors

If we hear that Saudi Arabia is concerned that oil prices may be getting 'too high,' they are likely worried that _____ the high oil price will lead Americans to buy alternate types of energy oil reserves will deplete faster production costs will rise global demand will increase

the high oil price will lead Americans to buy alternate types of energy

Imagine a product whose demand curve is rather steep. If the price of that product rises, what will happen? The quantity demanded will fall significantly The quantity demanded will increase The quantity demanded will remain unchanged The quantity demanded will fall slightly

The quantity demanded will fall slightly

If you overslept and missed class, your opportunity cost will be... The time you spent sleeping The money you saved on transportation The exam-related information that was covered in class you missed The breakfast you missed

The exam-related information that was covered in class you missed

A change in demand means there has been a shift in the demand curve, and a change in quantity demanded means that _____ new substitutes have entered the market price has changed and there is movement along the demand curve income levels have increased consumer preferences have changed

price has changed and there is movement along the demand curve

The problem with a socialist economic system is that under socialism, _____ prices are too high the incentives to produce the goods consumers want and do it without waste are too weak there is too much competition resources are underutilized

the incentives to produce the goods consumers want and do it without waste are too weak

Of the following, which event is most likely to cause a decrease in the supply of pizzas? An improvement in pizza-making technology An increase in the cost of cheese (an ingredient) A new pizza restaurant opening nearby A decrease in consumer demand

An increase in the cost of cheese (an ingredient)

Production Possibility Curve (PPC) Tax multiplier Loanable Funds Change in AD

Production Possibility Curve (PPC)

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