Question 1

Since 1950

Accepted Answer

A)  economic expansions in the United States have been so short that expansions barely exist. 
B)  the average length of expansions in the United States have become shorter as compared to before 1950. 
C)  the average length of expansions in the United States have become longer as compared to before 1950. 
D)  the average length of expansions in the United States are about the same length as compared to before 1950. 
A)  economic expansions in the United States have been so short that expansions barely exist. 
B)  the average length of expansions in the United States have become shorter as compared to before 1950. 
C)  the average length of expansions in the United States have become longer as compared to before 1950. 
D)  the average length of expansions in the United States are about the same length as compared to before 1950.

Question 2

The quantity of goods and services that can be produced by one worker or by one hour of work is referred to as

Accepted Answer

A)  technology. 
B)  labor productivity. 
C)  real GDP. 
D)  human capital. 
A)  technology. 
B)  labor productivity. 
C)  real GDP. 
D)  human capital.

Question 3

If GDP grows at a rate of 3% per year, approximately how long will it take for GDP to double in size?

Accepted Answer

A)  12 years 
B)  21 years 
C)  23 years 
D)  35 years 
A)  12 years 
B)  21 years 
C)  23 years 
D)  35 years

Question 4

If real GDP per capita measured in 2009 dollars was $6,000 in 1950 and $48,000 in 2018, we would say that in 2018, the average American could buy ________ times as many goods and services as the average American in 1950.

Accepted Answer

A)  1/8 
B)  4 
C)  8 
D)  12 
A)  1/8 
B)  4 
C)  8 
D)  12

Question 5

Explain and show graphically how a decrease in government spending affects the equilibrium interest rate and equilibrium quantity of loanable funds in the market for loanable funds.

Accepted Answer

When government spending decreases, gove

Question 6

Since 1950, expansions in the United States have become ________, while recessions have become ________.

Accepted Answer

A)  longer; longer 
B)  shorter; shorter 
C)  shorter; longer 
D)  longer; shorter 
A)  longer; longer 
B)  shorter; shorter 
C)  shorter; longer 
D)  longer; shorter

Question 7

According to the "Rule of 70," how many years will it take for real GDP per capita to double when the growth rate of real GDP per capita is 5%?

Accepted Answer

A)  less than 1 year 
B)  5 years 
C)  14 years 
D)  35 years 
A)  less than 1 year 
B)  5 years 
C)  14 years 
D)  35 years

Question 8

Figure 21-5  
-Refer to Figure 21-5. "Crowding out" of firm investment as a result of a budget deficit is illustrated by the movement from ________ in the graph above.

Accepted Answer

A)  A to B 
B)  B to A 
C)  B to C 
D)  C to A 
A)  A to B 
B)  B to A 
C)  B to C 
D)  C to A

Question 9

Briefly explain how the miserliness of Ebenezer Scrooge might actually be beneficial for economic growth.

Accepted Answer

Ebenezer Scrooge is known for his unwill

Question 10

In a closed economy, public saving plus private saving is equal to

Accepted Answer

A)  investment. 
B)  taxes minus transfers. 
C)  the budget surplus. 
D)  the budget deficit. 
A)  investment. 
B)  taxes minus transfers. 
C)  the budget surplus. 
D)  the budget deficit.

Question 11

Countries without well-developed financial systems are able to sustain high levels of economic growth.

Accepted Answer

A) True 
 B)False

Question 12

The Business Cycle Dating Committee, a part of the ________, officially decides when a recession begins and ends.

Accepted Answer

A)  federal government 
B)  Bureau of Labor Statistics 
C)  National Bureau of Economic Research 
D)  Federal Reserve 
A)  federal government 
B)  Bureau of Labor Statistics 
C)  National Bureau of Economic Research 
D)  Federal Reserve

Question 13

What type of consumer goods is more affected by the business cycle: durable goods or nondurable goods? Why?

Accepted Answer

Some workers lose income during a recess

Question 14

In terms of economic growth, the key measure of the standard of living is

Accepted Answer

A)  real GDP. 
B)  nominal GDP. 
C)  real GDP per capita. 
D)  nominal GDP per capita. 
A)  real GDP. 
B)  nominal GDP. 
C)  real GDP per capita. 
D)  nominal GDP per capita.

Question 15

In an open economy, the relationship between GDP (Y) and expenditures is Y = C + I + G.

Accepted Answer

A) True 
 B)False

Question 16

Between 1950 and 2009, the average length of recessions in the United States was

Accepted Answer

A)  11 months. 
B)  two years. 
C)  three months. 
D)  eighteen months. 
A)  11 months. 
B)  two years. 
C)  three months. 
D)  eighteen months.

Question 17

When the economy reaches a trough in a business cycle, which of the following will occur?

Accepted Answer

A)  Income, production, and employment will continue to fall. 
B)  Income, production, and employment will begin to rise. 
C)  Income and production will rise, but employment will continue to fall. 
D)  Employment rises, but income and production will continue to fall. 
A)  Income, production, and employment will continue to fall. 
B)  Income, production, and employment will begin to rise. 
C)  Income and production will rise, but employment will continue to fall. 
D)  Employment rises, but income and production will continue to fall.

Question 18

If labor productivity growth slows down in a country, this means that the growth rate in ________ has declined.

Accepted Answer

A)  labor force participation 
B)  the quantity of goods or services that can be produced by one hour of work 
C)  the working-age population 
D)  nominal GDP 
A)  labor force participation 
B)  the quantity of goods or services that can be produced by one hour of work 
C)  the working-age population 
D)  nominal GDP

Question 19

How will an increase in the government budget surplus as a result of lower government spending (with no change in net taxes) affect private saving in the economy?

Accepted Answer

A)  Private saving will increase by the amount of increase in the budget surplus. 
B)  Private saving will decrease by the amount of increase in the budget surplus. 
C)  Private saving will decrease by less than the amount of increase in the budget surplus. 
D)  Private saving will be unaffected by the increase in the budget surplus. 
A)  Private saving will increase by the amount of increase in the budget surplus. 
B)  Private saving will decrease by the amount of increase in the budget surplus. 
C)  Private saving will decrease by less than the amount of increase in the budget surplus. 
D)  Private saving will be unaffected by the increase in the budget surplus.

Question 20

Which one of the following is not considered a financial intermediary?

Accepted Answer

A)  a bank 
B)  a pension fund 
C)  an insurance company 
D)  a credit counselor 
A)  a bank 
B)  a pension fund 
C)  an insurance company 
D)  a credit counselor

Exam 21: Economic Growth, the Financial System, and Business Cycles

Since 1950

The quantity of goods and services that can be produced by one worker or by one hour of work is referred to as

If GDP grows at a rate of 3% per year, approximately how long will it take for GDP to double in size?

If real GDP per capita measured in 2009 dollars was $6,000 in 1950 and $48,000 in 2018, we would say that in 2018, the average American could buy ________ times as many goods and services as the average American in 1950.

Explain and show graphically how a decrease in government spending affects the equilibrium interest rate and equilibrium quantity of loanable funds in the market for loanable funds.

Since 1950, expansions in the United States have become ________, while recessions have become ________.

According to the "Rule of 70," how many years will it take for real GDP per capita to double when the growth rate of real GDP per capita is 5%?

Figure 21-5 -Refer to Figure 21-5. "Crowding out" of firm investment as a result of a budget deficit is illustrated by the movement from ________ in the graph above.

Briefly explain how the miserliness of Ebenezer Scrooge might actually be beneficial for economic growth.

In a closed economy, public saving plus private saving is equal to

Countries without well-developed financial systems are able to sustain high levels of economic growth.

The Business Cycle Dating Committee, a part of the ________, officially decides when a recession begins and ends.

What type of consumer goods is more affected by the business cycle: durable goods or nondurable goods? Why?

In terms of economic growth, the key measure of the standard of living is

In an open economy, the relationship between GDP (Y) and expenditures is Y = C + I + G.

Between 1950 and 2009, the average length of recessions in the United States was

When the economy reaches a trough in a business cycle, which of the following will occur?

If labor productivity growth slows down in a country, this means that the growth rate in ________ has declined.

How will an increase in the government budget surplus as a result of lower government spending (with no change in net taxes) affect private saving in the economy?

Which one of the following is not considered a financial intermediary?

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

Externalities, Environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Since 1950, expansions in the United States have become , while recessions have become .