BEC MCQ 5.1 Flashcards Preview

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Flashcards in BEC MCQ 5.1 Deck (19):
1

A recession can be caused by

A decrease in aggregate demand
A decrease in aggregate supply

2

A period where Real GDP is rising is called

expansion

3

Peak and trough

Highest and lowest level of economic activity

4

Most expansionary set of fiscal policies

Increase Government purchases decrease in taxes
Increase in taxes in a contractionary fiscal policy
An increase in supply of money is a expansionary monetary policy

5

A increase in Government spending will cause

Real GDP rise and unemployment fall

6

An increase in personal income tax will cause

Real GDP to fall and unemployment to rise

7

Normal sequence of business cycle

Expansion, peak, Contraction and trough

8

Leftward shift of aggregate demand curve

An increase in the level of real interest rates

9

Right shift of demand curve

An increase in wealth, An increase in Government spending, An increase in consumer confidance. A fall in input rates and fall in input costs

10

Within the framework of aggregate demand and aggregate supply model an increase in

Real output to expand and price level to fall

11

Which one of the following is most likely to accompany a reduction in aggregate demand

A decrease in employment

12

An increase in nominal wages

will cause in Decreasing GDP and increase in price level

13

Economic Fluctuations ae best described as

Fluctuations in the level of economic activity relative to a long term growth trend.
Rightward shift in aggregrate supply curve

14

Real GDP per capital

Real GDP/ Population

15

Reasons for national output to fall

An rise in real interest rates, a rise in value of x currency,decrease in government spending, and increase in consumer taxes

16

Variations and intensity

It depends how long they last and the degree of peak trough intensity. Recession is defined as two quarters of negative economic growth and a depression is more qualitatively assessed after both depth and duration

17

law of diminishing returns

Reduced output for each unit of input as industries either mature or become less in size

18

When potential national income

is greater than the achieved national income

19

1-MPC

Change in GDP