Economic Indicators & Business Cycle unit test

A test on this unit alone, marked as a percentage and a letter grade — for the test your class is actually sitting, rather than for May. Answer everything, then submit once: seeing the answer to question 3 before attempting question 4 makes the final percentage meaningless.

Paper 1 Paper 2 Paper 3

Each paper is built from this unit’s 36 terms and is the same for everyone, so a teacher can assign “Unit 2, Paper 1” and every student sits the identical test. Multiple choice is marked objectively; the written sections you mark yourself against the model answer and rubric.

Suggested time 33 min 30 points0/17 attempted

Recessionary gap

GDP deflator

Rule of 70

Who gains and loses from unexpected inflation

Demand-pull inflation

Full employment output

Discouraged worker

Nominal vs real values

Excluded from GDP

Cyclical unemployment

Expenditure approach to GDP

Why only final goods count

Short answer 1. Define or explain: Nominal GDP

3 pts

Short answer 2. Define or explain: Labor force

3 pts

Short answer 3. Define or explain: Business cycle

3 pts

Short answer 4. Define or explain: Recession

3 pts

Free response

6 pts

This course has no free-response prompt tagged to this unit, so one from elsewhere in the course is used. It is still worth writing — the skill transfers.

Loriland is producing below full employment (a recessionary gap).

Draw a correctly labeled AD-AS graph showing the current short-run equilibrium relative to full-employment output Yf.

Identify one fiscal policy to close the gap.

Using the money market, show and explain the effect of an expansionary open-market operation on the nominal interest rate.

Explain how that interest-rate change affects AD and real GDP.