Question 1
Which of the following is a correct sequence of events during a recession?
◦ Unemployment falls, income falls, tax revenue falls, unemployment benefits rise, and the budget deficit rises.
◦ Unemployment rises, income falls, tax revenue falls, unemployment benefits rise, and the budget deficit rises.
◦ Unemployment rises, income falls, tax revenue rises, unemployment benefits fall, and the budget deficit falls.
◦ Unemployment rises, income rises, tax revenue rises, unemployment benefits rise, and the budget deficit rises.
Question 2
Which of the following is a correct sequence of events during an expansion?
◦ Unemployment falls, income falls, tax revenue falls, unemployment benefits rise, and the budget deficit falls.
◦ Unemployment rises, income falls, tax revenue falls, unemployment benefits rise, and the budget deficit rises.
◦ Unemployment rises, income falls, tax revenue rises, unemployment benefits fall, and the budget deficit falls.
◦ Unemployment falls, income rises, tax revenue rises, unemployment benefits fall, and the budget deficit falls.
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