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

Economic growth depends more on technological change than on increases on capital per hour worked.

If Ebenezer Scrooge spends rather than saves his vast wealth, he will

________ are financial securities that represent promises to repay a fixed amount of funds.

Suppose you are an advisor to the Business Cycle Dating Committee. You are asked to look at macroeconomic data to evaluate whether the economy has entered a recession this year. Which data do you look at? How does the economy behave at the onset of a recession?

The key to sustained economic growth is increasing labor productivity.

Because of technological change, oil companies like Chevron were able to produce almost twice as much output from refineries in 2016 as in 1950 while using 60 percent fewer workers. This represents ________ in output per worker, which is also known as ________.

________ is the ease with which a financial security can be exchanged for money.

If, in a closed economy, real GDP is $30 billion, consumption is $20 billion, and government purchases are $5 billion, what is total saving in the economy?

What factors increase potential GDP? Include a definition of potential GDP in your answer.

Under which of the following circumstances would the government be running a deficit?

One difference between stocks and bonds is that

Figure 21-6 -Refer to Figure 21-6. The loanable funds market is in equilibrium, as shown in the figure above. As a result of an increase in the government budget deficit, the ________ for loanable funds will ________, thereby ________ the equilibrium real interest rate and ________ the equilibrium quantity of loanable funds.

The demand for loanable funds has a ________ slope because the lower the interest rate, the ________ number of investment projects are profitable, and the ________ the quantity of loanable funds demanded.

Figure 21-3 -Refer to Figure 21-3. Which of the following is consistent with the graph depicted above?

Describe what happens to inflation during the business cycle. Give an intuitive explanation as to why inflation changes the way it does over the business cycle.

As the economy nears the end of an expansion, which of the following do we typically see?

According to Robert Fogel, economic growth ________ health, and health ________ economic growth.

How has economist Robert Fogel explained that economic growth is connected to life expectancy? Based on this connection, in what country would you expect to have a longer life expectancy, the United States or India? Explain.

Purchases of Huggies diapers should

How does a decrease in the tax rate on income earned on saving affect saving, investment, the interest rate, and economic growth?