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

The Congressional Budget Office reported that federal budget deficits in the United States were likely to increase during the next decade, and due to these higher deficits, "the nation's capital stock ultimately would be smaller, and productivity and income would be lower than would be the case if the debt was smaller." This higher budget deficit could crowd out business investment if it resulted in an increase in interest rates. Crowding out of business investment would be represented graphically by a

In a closed economy

Suppose that real GDP for 2017 was $10,000 billion and real GDP for 2018 was $11,000 billion. What is the rate of growth of real GDP between 2017 and 2018?

What is human capital?

Which of the following indicates that the U.S. economy has become more stable since 1950?

What two factors are the keys to determining labor productivity?

The period of expansion ends with a ________ and the period of recession ends with a ________.

Explain and show graphically how an increase in government spending affects the equilibrium interest rate in the market for loanable funds.

India's rapid growth can be explained by

The best measure of the standard of living is

Explain why a centrally-planned economy might not grow as rapidly as a market economy.

Article Summary According to the U.S. Department of Labor, nonfarm labor productivity rose at an annualized rate of 0.9 percent in the second quarter of 2017 as hours worked and output per worker both rose at their fastest pace in 18 months. Compared to the same quarter in 2016, productivity increased at a rate of 1.2 percent, its best performance in two years., while unit labor costs fell at a rate of 0.2 percent. From 2007 to 2016, labor productivity increased at an average annual rate of 1.2 percent, well below its long-term growth rate of 2.1 percent from 1947 to 2016. This is an indication of a decline in the potential growth rate, blamed in part on a shortage of workers and low capital expenditure. -Refer to the Article Summary. A slowdown in the growth rate of labor productivity, as occurred from 2007-2016, will likely result in

Define the two categories of saving in the economy.

What is the name of the organization that defines business cycle peaks and troughs in the United States?

If labor productivity growth slows down in a country, this will

Which of the following is a correct statement?

An increase in the demand for loanable funds will occur if there is

Which of the following will increase the real interest rate?

Potential GDP in the United States

Which of the following goods would see the largest decline in demand during a recession?