● During a recession, what is one way governments try to encourage growth? by increasing unemployment benefits ● Which indicators do economists use to determine the state of the economy? Choose three answers. employment levels and gross domestic product (GDP) ● Which of the following is a characteristic of prosperity in the peak phase of the business cycle? high levels of production ● What do these graphs indicate about the relationship between employment levels and prices during economic cycles? As unemployment rates rise, average prices fall. ● Which statement best explains this passage? It describes government measures to stimulate demand and bring about a recovery. ● Time is measured along the x-axis. What is measured along the y-axis? economic output ● Which event most likely explains renewed demand in a recovery period? Economic policy renews consumer confidence and demand. ● Income reaches the highest level at the peak point of the business cycle. ● Which best describes the nature of cause and effect in the context of the business cycle? Consumers spend less, causing worker layoffs. ● Which best describes how a recession develops as demand and production decrease? The recession accelerates.