Test: Business Cycles- 2

QUESTION: 1

_____ indicators change before the economy itself changes.

A.
Lagging
B.
Coincident
C.
Leading
D.
concurrent

Solution:

QUESTION: 2

_____ indicators change after the economy as a whole changes.

A.
Lagging
B.
Coincident
C.
Leading
D.
Concurrent

Solution:

QUESTION: 3

Changes in stock prices, profit margins and profits, manufacturing activity, etc. are examples of _____ indicator.

A.
Leading
B.
Lagging
C.
Concurrent
D.
Coincident

Solution:

QUESTION: 4

A variable that moves later than aggregate economic activity is called _____

A.
a leading variable
B.
a coincident variable
C.
a lagging variable
D.
a cyclical variable

Solution:

QUESTION: 5

While _____ indicators forecast economic fluctuation, _____ indicators confirm the trends.

A.
lagging ; leading
B.
lagging ; coincident
C.
coincident ; leading
D.
leading ; lagging

Solution:

QUESTION: 6

A variable that occur simultaneously with the business cycle movements is _____ indicator.

A.
Leading
B.
Lagging
C.
Coincident
D.
Cyclical

Solution:

QUESTION: 7

Coincident indicators show _____

A.
the current state of business cycle
B.
the rate of change of expansion
C.
the rate of change of contraction
D.
all the above

Solution:

QUESTION: 8

At the time of Great Depression of 1930s, the global GDP fell by around _____

A.
12%
B.
14%
C.
15%
D.
10%

Solution:

QUESTION: 9

Which one of the following is not correct about business cycle?

A.
They occur simultaneously in all industries and sectors
B.
They affect not only output level but also other related variables
C.
They are international in character
D.
None of the above

Solution:

QUESTION: 10

Which of the following describes best a typical trade cycle?

A.
Economic expansions are followed by economic contractions
B.
Inflation is followed by rising income and employment
C.
Economic expansions are followed by economic growth and development
D.
Stagflation followed by rising employment

Solution:

QUESTION: 11

During upswing, the unemployment rate and output _____

A.
rises ; falls
B.
rises ; rises
C.
falls ; rises
D.
falls ; falls

Solution:

QUESTION: 12

Which of the following does not occur during expansion phase?

A.
Consumer spending increases
B.
Employment increases as demand for labour rises
C.
Business profits and business confidence increase
D.
None of the above

Solution:

QUESTION: 13

When aggregate economic activity is declining, the economy is said to be in _____

A.
contraction
B.
an expansion
C.
a trough
D.
a turning point

Solution:

QUESTION: 14

Which one of the following is not an example of coincident indicator?

A.
GDP
B.
inflation
C.
retail sales
D.
New orders for plant and machinery

Solution:

QUESTION: 15

Which one of the following is an example of lagging indicator?

A.
personal income
B.
new orders for plant and equipment
C.
the consumer price index
D.
slower deliveries

Solution:

QUESTION: 16

_____ is of the view that fluctuations in economic activities are because of fluctuations in aggregate effect demand.

A.
Keyens
B.
Schumpeter
C.
Nicholas Kaldor
D.
Joan Robinson

Solution:

QUESTION: 17

High rate of investment brings _____

A.
high level of employment
B.
increase in the aggregate demand
C.
increase in output
D.
all the above

Solution:

QUESTION: 18

If any unemployment exists during expansion phase of business cycle, it is _____ un employment.

A.
voluntary and frictional
B.
technological and structural
C.
frictional and structural
D.
structural and involuntary

Solution:

QUESTION: 19

The most probable outcome of increase in aggregate demand is _____

A.
expansion of economic activity
B.
contraction of economic activity
C.
stable economic activity
D.
volatile economic activity

Solution:

QUESTION: 20

According to _____ a trade cycles is a purely monetary phenomena

A.
Keyens
B.
Hawtrey
C.
Schumpeter
D.
Nicholas Kaldor

Solution:

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20 Questions MCQ Test Business Economics for CA Foundation | Test: Business Cycles- 2

_____ indicators change before the economy itself changes.

_____ indicators change after the economy as a whole changes.

Changes in stock prices, profit margins and profits, manufacturing activity, etc. are examples of _____ indicator.

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