Becker CPA Review, PassMaster QuestionsLecture: Business 2
© 2009 DeVry/Becker Educational Development Corp. All rights reserved.
CPA-03227Type1 M/C A-D Corr Ans: C PM#3 B 2-01
3. CPA-03227 BEC C04 #1 Page 5During a recession:a. Output (real GDP) will be increasing.b. The natural rate of unemployment will increase dramatically.c. Potential output will exceed actual output.d. Actualoutput ill exceed potential output.
Choice "c" is correct. During a recession, potential output (real GDP) will exceed actual output (realGDP).Choice "a" is incorrect. Real GDP is falling during a recession.Choice "b" is incorrect. The natural rate of unemployment will not be affected by the various phases of the business cycle. Actual unemployment will change with the cycle.Choice "d" is incorrect. Actual output will not exceed potential output except at the peak of the cycle, andperhaps not then.
CPA-03233 Type1 M/C A-D Corr Ans: D PM#4 B 2-01
4. CPA-03233 1B.C02 -14 Page 8 A recession can be caused by:a. An increase in aggregate demand.b. A decrease in aggregate supply.c. A decrease in aggregate demand.d. Both "b" and "c".
Choice "d" is correct. Both choices "b" and "c" can cause a recession. A recession is defined as a periodof falling GDP and rising unemployment. GDP will fall if there is a decrease in aggregate demand or adecrease in aggregate supply.Choice "a" is incorrect. An increase in aggregate demand will cause GDP to increase NOT decrease.Choice "b" is incorrect, per the above explanation.Choice "c" is incorrect, per the above explanation.
CPA-03246Type1 M/C A-D Corr Ans: C PM#5 B 2-01
5. CPA-03246 1B.C02 -20 Page 3 A period during which real GDP is rising and unemployment is falling is called a(n):a. Recession.b. Peak.c. Expansion.d. Trough.
Choice "c" is correct. During an expansion, real GDP is rising and unemployment is falling.Choice "a" is incorrect. A recession is when real GDP is falling NOT rising.
Page 3of 10