ECN 211 Exam 3 ASU Hill questions with correct answers

What is a recession? Correct Answer-economic contraction; two straight quarters of negative GDP growth What is a boom? Correct Answer-economic expansion; boom length does not predict a recession What are the characteristics of a good economy? Correct Answer-lots of job openings, firms are raising wages to attract workers, asset values are rising, consumers borrow and spend money freely What are the characteristics of a bad economy? Correct Answer-new job openings are scarce, firms not seeking new employees, asset prices fall, consumers try to save money business cycle Correct Answer-Alternating periods of economic expansion and economic recession Unemployment rates in the business cycle... Correct Answer-are a lagging indicator; when a recession occurs, employment may stay low for awhile Why do economies fluctuate? Correct Answer-a change in supply or demand Demand side recession Correct Answer-Changes in willingness of consumers and firms to spend causes fluctuations in GDP Supply side recession Correct