Unit 6 Basic Economic Concepts

Question 1

Business Cycle

Answer 1

A predictable long term pattern of alternating periods of economic growth and decline. The cycle passes through four stages: expansion, peak, contraction, and trough.

Question 2

Gross domestic product (GDP)

Answer 2

The total value of goods and services produced in a country during 1 year. It includes consumption, government purchases, investments, and export minus imports.

Question 3

Yield curve

Answer 3

A graphic representation of the actual or projected yields of fixed-income securities in relation to their maturities.

Question 4

Inverted yield curve

Answer 4

A chart showing long-term debt instruments having lower yields than short-term debt instruments.

Question 5

Flat yield curve

Answer 5

A chart showing the yields of bonds with short maturities as equal to the yields of bonds with long maturities.

Question 6

Inflation

Answer 6

A persistent and measurable rise in the general level of prices.

Question 7

Deflation

Answer 7

A persistent and measurable fall in the general level of prices.

Question 8

Gross domestic product (GDP)

Answer 8

The total value of goods and services produced in a country during 1 year. It includes consumption, government purchases, investments, and exports minus imports.