1.Which one of the following most accurately describes the normal sequence of a business cycle?

A)   Expansion, contraction, recessionary trough, and peak.

B)   Peak, contraction, expansion, and recessionary trough.

C)   Contraction, recessionary trough, expansion, and peak.

D)   Recessionary trough, contraction, expansion, and peak.

2.During a recent in-house seminar at United Banks of Davos, Helmut Fahrstadt, the seminar leader, was discussing the business cycle and its phases. He made the following statement:

“During a recession one should expect an economy’s real GDP to increase, its rate of inflation to increase, and its rate of employment to fall.”

Is the statement made by Fahrstadt correct as it pertains to real GDP, inflation and the rate of employment?

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A)                   Correct                                   Incorrect                      Incorrect

B)                   Incorrect                                  Correct                       Incorrect

C)                    Correct                                    Correct                       Correct

D)                   Incorrect                                 Incorrect                       Correct

答案和详解如下：

1.Which one of the following most accurately describes the normal sequence of a business cycle?

A)   Expansion, contraction, recessionary trough, and peak.

B)   Peak, contraction, expansion, and recessionary trough.

C)   Contraction, recessionary trough, expansion, and peak.

D)   Recessionary trough, contraction, expansion, and peak.

The correct answer was C)

The business cycle has four phases that normally occur in sequence: 1) peak , 2) contraction, 3) recessionary trough, and 4) expansion.

2.During a recent in-house seminar at United Banks of Davos, Helmut Fahrstadt, the seminar leader, was discussing the business cycle and its phases. He made the following statement:

“During a recession one should expect an economy’s real GDP to increase, its rate of inflation to increase, and its rate of employment to fall.”

Is the statement made by Fahrstadt correct as it pertains to real GDP, inflation and the rate of employment?

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Real GDP

Rate of Inflation

Rate of Employment

A)                   Correct                                   Incorrect                      Incorrect

B)                   Incorrect                                  Correct                       Incorrect

C)                    Correct                                    Correct                       Correct

D)                   Incorrect                                 Incorrect                       Correct

The correct answer was D)

During a recession, real GDP is decreasing and the unemployment rate is increasing. In general, during this phase the rate of inflation is most likely decreasing.