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Subjects · Leaving Cert Economics

Leaving Cert Economics: Business cycles & economic aims

How often Business cycles & economic aims comes up on the Economics papers, every year it was asked, and questions to try.

HL Asked on 5 of the last 5 Higher Level papers, most recently in 2025. banker

OL Asked on 1 of the last 5 Ordinary Level papers, most recently in 2025.

Business cycles & economic aims, Higher Level(7 marks)

Quick ones on Business cycles & economic aims.

(a)Which phase of the business cycle has falling output and rising unemployment?
  1. Boom
  2. Recession
  3. Recovery
(b)A recession is commonly defined as…
  1. A year in which inflation is above 2%
  2. A single quarter in which real GDP falls
  3. Two quarters in a row of falling real GDP
(c)Why can the aim of full employment conflict with price stability?
  1. Tight labour markets push up wages and prices
  2. Unemployed workers raise inflation
  3. Full employment always causes deflation
Show the answers

(a) Recession

(b) Two quarters in a row of falling real GDP

(c) Tight labour markets push up wages and prices

Your turn: Higher Level questions on Business cycles & economic aims.

Higher Level

Asked on 5 of the last 5 Higher Level papers, most recently in 2025. banker

Every paper, year by year

YearWhere it came up
2025Q10
2024Q2
2023Q14
2022Q11
2021Q15

Links open the State Examinations Commission’s paper for that year.

More Business cycles & economic aims questions

Business cycles & economic aims, 2 marks

On a business cycle diagram, the trend line shows…

  1. Inflation over the course of the cycle
  2. Output during recessions only, not booms
  3. The long-run average growth path of output
Show the answer

The long-run average growth path of output

Actual output rises above the trend in booms and falls below it in recessions. The trend reflects growth in the economy's productive capacity.

Business cycles & economic aims, 3 marks

Why is price stability an economic aim?

  1. It keeps interest rates at zero permanently
  2. It protects savings and export competitiveness
  3. It guarantees full employment and higher wages for all
Show the answer

It protects savings and export competitiveness

Stable prices let people and firms plan, keep the value of savings and stop Irish goods becoming dearer than rivals'. It does not by itself guarantee jobs.

Ordinary Level

Asked on 1 of the last 5 Ordinary Level papers, most recently in 2025.

Every paper, year by year

YearWhere it came up
2025Q16
2024Not asked
2023Not asked
2022Not asked
2021Not asked

Links open the State Examinations Commission’s paper for that year.

More Business cycles & economic aims questions

Business cycles & economic aims, 2 marks

Output falling for two quarters in a row is usually called?

  1. A boom
  2. A recovery
  3. A recession
Show the answer

A recession

A recession is usually defined as two quarters in a row of falling real GDP. Jobs are lost, incomes fall and tax revenue drops.

Business cycles & economic aims, 2 marks

Which is an economic aim of the Irish government?

  1. A falling population
  2. Full employment
  3. High inflation
Show the answer

Full employment

Common aims include full employment, stable prices, economic growth, sound public finances, a fair spread of income and balanced regional development.

Business cycles & economic aims, 3 marks

Why can full employment and stable prices conflict?

  1. Very low unemployment can push up wages and prices
  2. Unemployment always pushes prices down to zero
  3. Full employment stops all economic growth
Show the answer

Very low unemployment can push up wages and prices

When nearly everyone has a job, firms compete for workers and bid up wages. Higher costs and more spending can drive inflation, so chasing one aim can harm the other.

Other Economics topics

All of Leaving Cert Economics