Section 2

Question 0

Economic growth

Answer 0

Is the increase in a nation’s real GDP over a period of time.

Question 1

Business cycle

Answer 1

Is the series of growing and shrinking periods of economic activity, measured by increases or decreases in real GDP.

Question 2

Recession

Answer 2

Is a prolonged economic contraction lasting two or more quarters (six months or more).

Question 3

Depression

Answer 3

Is an extended period of high unemployment and reduced business activity.

Question 4

Stagflation

Answer 4

Describes periods during which prices rise at the same time that there is a slowdown in business activity.

Question 5

Aggregate demand

Answer 5

Is the sum of all the demand in the economy.

Question 6

Aggregate supply

Answer 6

Is the sum of all the supply in the economy.

Question 7

Macroeconomic equilibrium

Answer 7

Is the point where the quantity of aggregate demand equals the quantity of aggregate supply.

Question 8

Leading indicators

Answer 8

Are measures of economic performance that usually change before real GDP changes.

Question 9

Coincident indicators

Answer 9

Are measures of economic performance that usually change at the same time as real GDP changes.

Question 10

Lagging indicators

Answer 10

Are measures of economic performance that usually change after real GDP changes.