1. An increase in GNP may be caused by

1. An increase in imports
2. An increase in investment spending
3. An increase in exports
4. An increase in government purchases

2. Budget deficit may be caused by

1. An increase in government's revenues
2. Increase in government spending
3. Decrease in government spending
4. High interest rates

3. A government policy that controls interest rates

1. Fiscal Policy
2. Tax Policy
3. C. Supply-side Policy
4. Monetary Policy

4. Recovery is not characterized by one the following:

1. Replacement of run-down equipment
2. Rising of employment
3. C. Business profits are low
4. Improvement of expectations as a result of increases in production, sales and profit

5. What do you call the recurring pattern of recession and recovery?

1. Economic Cycle
2. Boom-bust Cycle
3. Slump Cycle
4. Business Cycle

6. Refers to the lag between policy decisions and its implementation.

1. Outside Lag
2. Decision Lag
3. Recognition Lag
4. Action Lag

7. Which of the following is/are true:

1. Cyclical firms are sensitive to market conditions
2. Defensive firms have low beta
3. I only
4. II only
5. Both 1 and II
6. Neither I nor II

8. It is considered as the "bell-weather" rate by banks.

1. 91-day T-bill rate
2. Forex
3. Inflation rate
4. Unemployment rate

9. What do you call the whole falling half of the business cycle?

1. Trough
2. Slump
3. Boom
4. Depression

10. This occurs when the national output is greater than the expected trend of growth.

1. Boom
2. Recovery
3. Slump
4. Recession