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

In 2003, Congress passed a tax cut that included a reduction in the marginal tax rate on stock dividends. This essentially increased the after-tax rate of return on stocks that offer dividends. Using the loanable funds market, describe what will happen to saving, investment, economic growth, the real interest rate, and the quantity of loanable funds exchanged.

Given the following economic data, what is the value of investment in a closed economy? Y = $10 trillion C = $5 trillion TR = $2 trillion G = $2 trillion

In comparison to a government that runs a balanced budget, when the government runs a budget deficit

There is a government budget surplus if

What is one difference between stocks and bonds?

Table 21-1 -Refer to Table 21-1. Using the table above, what is the approximate growth rate of real GDP from 2017 to 2018?

The only way the standard of living of the average person in a country can increase is if ________ increases faster than ________.

Which of the following is not a reason why the U.S. economy has been more stable since 1950?

In the United States, the average length of expansions from 1950 to 2009 was more than twice as long than they were from 1900 to 1950.

Increases in real GDP since 1900 can actually underestimate growth in the standard of living for Americans since 1900 because

According to the "Rule of 70," it will take 4 years for real GDP per capita to double when the growth rate of real GDP per capita is

Figure 21-6 -Refer to Figure 21-6. The loanable funds market is in equilibrium, as shown in the figure above. An increase in the supply of loanable funds could result in which of the following combinations of the real interest rate and quantity of loanable funds at a new equilibrium?

A recession often begins with a(n) ________ in spending by firms on capital goods and a(n) ________ in spending on durable goods by households.

Which of the following statements describes the experiences of Chevron since it became independent in 1911?

Which of the following is not one of the key services provided by the financial system?

According to the National Bureau of Economic Research, the recession that began in December 2007

There is a federal budget deficit when

Give three reasons why the U.S. economy was more stable from 1950-2007 than it was prior to 1950.

Economists have not found a way to predict when recessions will begin and end.

Outline the various actions the government sector could take to promote growth.