Chapter 11 Measuring a Nation's Production and Income

4) When real GDP falls for two consecutive quarters the economy is in a

A) depression.

B) recession.

C) peak.

D) trough.

5) The date at which a recession starts is called the

A) trough.

B) peak.

C) plateau.

D) depression.

6) The period of time in which the level of output moves from a trough to a peak is called a

A) recovery.

B) depression.

C) contraction.

D) plateau.

7) From World War II through 2010, the United States experienced ________ recessions.

A) 2

B) 5

C) 11

D) 15

8) A depression is

A) a severe recession.

B) a sustained economic upturn.

C) another word for a bull market.

D) the period of time following a peak in the business cycle.

9) How many quarters (3-month periods) must the "real" GDP decline to have the economy considered to be in a recession?

A) 1

B) 2

C) 3

D) 4

10) The "expansion" of an economy occurs after

A) firms produce more goods.

B) people spend more money.

C) a trough.

D) an inflationary period.

11) The common term for a severe recession is a

A) downturn.

B) depression.

C) bottoming out.

D) economic adjustment.

Recall the Application about the time it took to recover from the recession of 2007-2009 to answer the following question(s).

12) Recall the application. GDP did not return to its pre-recession peak until

A) the third quarter of 2009.

B) the first quarter of 2010.

C) the second quarter of 2011.

D) the fourth quarter of 2012.

13) Recall the application. Some economists believe that the economy was slow to recover from the recession of 2007-2009 because this recession was brought on primarily by

A) a decrease in the demand for housing.

B) rapid inflation.

C) increasing oil prices.

D) a financial crisis.