Question: Which of these situations are more likely to happen in a GOOD economy?

Answer: Carlos was able to finish a design bootcamp and interview at many companies until he finds the job he likes best.

Question: Which of the these situations are more likely to happen in a GOOD economy?

Answer: Alex just graduated from technical school and took a new job that pays her a high salary.

Question: Which of these situations are more likely to happen in a BAD economy?

Answer: The Adobo Grill restaurant has to lay off two employees because business is very slow.

Question: What is GDP (gross domestic product)?

Answer: The total value of all the finished goods and services produced in a country over a certain period of time.

Question: ______ is the total value of all the finished goods and services produced in a country over a certain period of time.

Answer: Gross domestic product (GDP)

Question: Which of the following statements about GDP (gross domestic product) is TRUE?

Answer: GDP measures the total value of all the finished goods and services produced in a country over a certain period of time.

Question: An increasing unemployment rate is associated with a growing economy.

Answer: FALSE

Question: A decreasing unemployment rate is associated with a growing economy.

Answer: TRUE

Question: Steadily increasing inflation is associated with a growing economy.

Answer: TRUE

Question: The ____ phase in the business cycle is a period when the level of business activity rises and GDP grows.

Answer: Expansion

Question: The ____ phase in the business cycle is a period when the level of business activity declines and GDP falls.

Answer: Contraction

Question: The ____ phase in the business cycle is a period that marks the end of declining business activity.

Answer: Trough

Question: Why might the government and Central Bank use policy to manage the economy?

Answer: To avoid a depression in the economy.

Question: Which of the following statements about economic policy are FALSE?

Answer: Economic policy is used to ensure all businesses are following regulations.

Question: If the government and Central Bank don't use economic policy, what could happen?

Answer: Prices could skyrocket, making goods more difficult to buy.&Unemployment could rapidly rise, making it harder to find a job.&GDP could rapidly fall, creating a recession in the economy.

Question: Which of the following statements about monetary policy is TRUE?

Answer: Monetary policy adjusts the amount of money and credit available in the economy.

Question: Which of the following statements about monetary policy is FALSE?

Answer: Monetary policy adjusts the tax policies in the economy.

Question: What is monetary policy?

Answer: Monetary policy is policy set by the Central bank to influence the amount of money and credit available in the economy.

Question: What is expansionary policy used for?

Answer: To stimulate growth in the economy.

Question: What is contractionary policy used for?

Answer: To fight rapid inflation in the economy.

Question: What is contractionary policy used for?

Answer: To discourage individuals from spending.

Question: In order to implement expansionary policy, the government and Central Bank must ______ government spending, ______ taxes, and ______ interest rates.

Answer: increase, decrease, decrease

Question: In order to implement contractionary policy, the government and Central Bank must ______ government spending, _____ taxes, and ______ interest rates.

Answer: decrease, increase, increase

Question: In order to implement expansionary policy, the Central Bank and government must _____ interest rates, ______ government spending, and _____ taxes.

Answer: decrease, increase, decrease

Question: The state of the economy alone can predict how the financial market will perform.

Answer: FALSE

Question: When the economy is doing well, the financial market is also guaranteed to do well.

Answer: FALSE

Question: Even if the economy is declining, the financial market can still do well.

Answer: TRUE

Question: Which of the following behaviors are more likely to happen in a GOOD economy?

Answer: Jordan takes out a loan to start a new business.

Question: Which of the following behaviors are more likely to happen in a GOOD economy?

Answer: David invests his money in a new tech startup company.& Galaxy Fitness, a locally-owned gym, takes out a loan to buy new equipment.

Question: Which of the following behaviors are more likely to happen in a BAD economy?

Answer: Fresh Mart, a local grocery store, had to lay off employees to keep costs down.