Question 1

It is desirable to reduce the rise in unemployment during recession.

Accepted Answer

A) True 
 B)False

Question 2

What saving rate is optimal?

Accepted Answer

A) The rate of spending that produces the minimum level of consumption per capita in the long-run steady state. 
B) The rate of saving at which the community will be made no better off by additional saving. 
C) The rate of saving that produces the steady level of consumption per capita in the long- run steady state. 
D) The rate of saving that produces the maximum level of consumption per capita during the recession. 
A) The rate of spending that produces the minimum level of consumption per capita in the long-run steady state. 
B) The rate of saving at which the community will be made no better off by additional saving. 
C) The rate of saving that produces the steady level of consumption per capita in the long- run steady state. 
D) The rate of saving that produces the maximum level of consumption per capita during the recession.

Question 3

What stage of the business cycle immediately follows the trough?

Accepted Answer

A) Peak. 
B) Recovery. 
C) Recession. 
D) Depression. 
A) Peak. 
B) Recovery. 
C) Recession. 
D) Depression.

Question 4

What stage of the business cycle immediately follows the peak?

Accepted Answer

A) Peak. 
B) Recovery. 
C) Recession. 
D) Depression. 
A) Peak. 
B) Recovery. 
C) Recession. 
D) Depression.

Question 5

Which of the following is not a part of the business cycle?

Accepted Answer

A) Peak. 
B) Trough. 
C) Existence. 
D) Recession. 
A) Peak. 
B) Trough. 
C) Existence. 
D) Recession.

Question 6

Exhibit 12-1 Business cycle
  
-In Exhibit 12-1,the recovery phase of the business cycle can be represented by points:

Accepted Answer

A) A and C 
B) B and F 
C) B and D 
D)  C and G. 
E)  E and G. 
A) A and C 
B) B and F 
C) B and D 
D)  C and G. 
E)  E and G.

Question 7

In the simple Solow growth model,investment depends crucially on:

Accepted Answer

A) the capital stock. 
B) the supply of labour. 
C) household savings. 
D) diminishing returns to capital. 
E) increasing returns to capital. 
A) the capital stock. 
B) the supply of labour. 
C) household savings. 
D) diminishing returns to capital. 
E) increasing returns to capital.

Question 8

A country can increase its real GDP per person by:

Accepted Answer

A) reducing the quantity of production factors. 
B) increasing the number of holidays. 
C) reducing its spending. 
D) using more productive technology. 
A) reducing the quantity of production factors. 
B) increasing the number of holidays. 
C) reducing its spending. 
D) using more productive technology.

Question 9

The trough is the point:

Accepted Answer

A) at which the economy reaches its maximum. 
B) at which unemployment is at the lowest level relative to recent years. 
C) where the level of real GDP is at a maximum. 
D) at which employment is at the lowest level relative to the recent years. 
A) at which the economy reaches its maximum. 
B) at which unemployment is at the lowest level relative to recent years. 
C) where the level of real GDP is at a maximum. 
D) at which employment is at the lowest level relative to the recent years.

Question 10

The four phases of a single business cycle are,in order,the trough,followed by a recovery,then a recession,ending with a peak.

Accepted Answer

A) True 
 B)False

Question 11

The phase in the business cycle in which real GDP declines is called a:

Accepted Answer

A) trendline. 
B) peak. 
C) recession. 
D) recovery. 
E) trough. 
A) trendline. 
B) peak. 
C) recession. 
D) recovery. 
E) trough.

Question 12

For a given state of unchanging production technologies without the technological change:

Accepted Answer

A) no further growth in living standards can be achieved at some point in time. 
B) further growth in living standards can be achieved if investment is higher than consumption. 
C) further growth in living standards can be achieved at some point in time. 
D) further growth in living standards can be achieved if saving is higher than investment. 
A) no further growth in living standards can be achieved at some point in time. 
B) further growth in living standards can be achieved if investment is higher than consumption. 
C) further growth in living standards can be achieved at some point in time. 
D) further growth in living standards can be achieved if saving is higher than investment.

Question 13

Arguments for reducing business-cycle fluctuations include which of the following?

Accepted Answer

A) These fluctuations do not affect the long-term growth potential. 
B) It increases the costs of unemployment. 
C) It increases the costs of inflation. 
D) It reduces the negative impact on the community. 
A) These fluctuations do not affect the long-term growth potential. 
B) It increases the costs of unemployment. 
C) It increases the costs of inflation. 
D) It reduces the negative impact on the community.

Question 14

If patent protection were not offered by governments,the result would be:

Accepted Answer

A) a solution to the problem of positive externalities. 
B) more private research would be undertaken. 
C) less public research would be undertaken. 
D) less opportunities for the technological progress. 
A) a solution to the problem of positive externalities. 
B) more private research would be undertaken. 
C) less public research would be undertaken. 
D) less opportunities for the technological progress.

Question 15

Which of the following is true?

Accepted Answer

A) The business cycle is a maximum period of economic growth. 
B) The rise and fall in nominal GDP is a significant indicator of the business cycle. 
C) Employment growth indicates a downturn in the business cycle. 
D) Increase in employment indicates a phase of economic growth. 
A) The business cycle is a maximum period of economic growth. 
B) The rise and fall in nominal GDP is a significant indicator of the business cycle. 
C) Employment growth indicates a downturn in the business cycle. 
D) Increase in employment indicates a phase of economic growth.

Question 16

According to the Solow growth model,technological progress:

Accepted Answer

A) was thought to occur within the economic system. 
B) was thought to occur independently of the economic growth process. 
C) was thought not to exist. 
D) was thought to exist but only inside the economic system. 
A) was thought to occur within the economic system. 
B) was thought to occur independently of the economic growth process. 
C) was thought not to exist. 
D) was thought to exist but only inside the economic system.

Question 17

The 'golden rule' level of capital per worker in the Solow model implies:

Accepted Answer

A) governments should consistently follow the same monetary policy rule regardless of the economy's stage in the business cycle. 
B) consumption will be maximised when capital per worker is at its maximum. 
C) there is an optimal rate of saving that will maximise investment. 
D) there is an optimal rate of saving that will maximise consumption. 
E) there is an optimal rate of saving that will maximise output. 
A) governments should consistently follow the same monetary policy rule regardless of the economy's stage in the business cycle. 
B) consumption will be maximised when capital per worker is at its maximum. 
C) there is an optimal rate of saving that will maximise investment. 
D) there is an optimal rate of saving that will maximise consumption. 
E) there is an optimal rate of saving that will maximise output.

Question 18

In the simple Solow growth model,with constant technology and constant returns to scale,GDP per capita can only increase if:

Accepted Answer

A) capital increases at the same rate as labour increases. 
B) capital increases at a slower rate than labour. 
C) capital increases at a faster rate than labour. 
D) increasing marginal returns to capital exists. 
A) capital increases at the same rate as labour increases. 
B) capital increases at a slower rate than labour. 
C) capital increases at a faster rate than labour. 
D) increasing marginal returns to capital exists.

Question 19

Patents are an example of governments:

Accepted Answer

A) stifling competition. 
B) protecting lazy monopolies. 
C) providing an incentive for firms to engage in research and development. 
D) inducing negative externalities. 
E) doing none of these things. 
A) stifling competition. 
B) protecting lazy monopolies. 
C) providing an incentive for firms to engage in research and development. 
D) inducing negative externalities. 
E) doing none of these things.

Question 20

In the Solow model,technological progress is assumed to occur:

Accepted Answer

A) systematically as part of capital accumulation. 
B) randomly outside the system. 
C) systematically as part of increases in output. 
D) systematically as part of increases in investment. 
A) systematically as part of capital accumulation. 
B) randomly outside the system. 
C) systematically as part of increases in output. 
D) systematically as part of increases in investment.

It is desirable to reduce the rise in unemployment during recession.

What saving rate is optimal?

What stage of the business cycle immediately follows the trough?

What stage of the business cycle immediately follows the peak?

Which of the following is not a part of the business cycle?

Exhibit 12-1 Business cycle -In Exhibit 12-1,the recovery phase of the business cycle can be represented by points:

In the simple Solow growth model,investment depends crucially on:

A country can increase its real GDP per person by:

The trough is the point:

The four phases of a single business cycle are,in order,the trough,followed by a recovery,then a recession,ending with a peak.

The phase in the business cycle in which real GDP declines is called a:

For a given state of unchanging production technologies without the technological change:

Arguments for reducing business-cycle fluctuations include which of the following?

If patent protection were not offered by governments,the result would be:

Which of the following is true?

According to the Solow growth model,technological progress:

The 'golden rule' level of capital per worker in the Solow model implies:

In the simple Solow growth model,with constant technology and constant returns to scale,GDP per capita can only increase if:

Patents are an example of governments:

In the Solow model,technological progress is assumed to occur:

Thinking like an economist

Production possibilities and opportunity cost

Market demand and supply

Markets in action

Elasticity of demand and supply

Production costs

Perfect competition

Monopoly

Monopolistic competition and oligopoly

Policy issues: resource taxes and climate change

Measuring the size of the economy

Inflation and unemployment

A simple model of the macro economy

The monetary and financial system

Macroeconomic policy I: monetary policy

Macroeconomic policy II: fiscal policy

International trade and finance

Applying graphs to economics

Filters

Exam 12: Business cycles and economic growth

It is desirable to reduce the rise in unemployment during recession.

What saving rate is optimal?

What stage of the business cycle immediately follows the trough?

What stage of the business cycle immediately follows the peak?

Which of the following is not a part of the business cycle?

Exhibit 12-1 Business cycle -In Exhibit 12-1,the recovery phase of the business cycle can be represented by points:

In the simple Solow growth model,investment depends crucially on:

A country can increase its real GDP per person by:

The trough is the point:

The four phases of a single business cycle are,in order,the trough,followed by a recovery,then a recession,ending with a peak.

The phase in the business cycle in which real GDP declines is called a:

For a given state of unchanging production technologies without the technological change:

Arguments for reducing business-cycle fluctuations include which of the following?

If patent protection were not offered by governments,the result would be:

Which of the following is true?

According to the Solow growth model,technological progress:

The 'golden rule' level of capital per worker in the Solow model implies:

In the simple Solow growth model,with constant technology and constant returns to scale,GDP per capita can only increase if:

Patents are an example of governments:

In the Solow model,technological progress is assumed to occur:

Thinking like an economist

Production possibilities and opportunity cost

Market demand and supply

Markets in action

Elasticity of demand and supply

Production costs

Perfect competition

Monopoly

Monopolistic competition and oligopoly

Policy issues: resource taxes and climate change

Measuring the size of the economy

Inflation and unemployment

A simple model of the macro economy

The monetary and financial system

Macroeconomic policy I: monetary policy

Macroeconomic policy II: fiscal policy

International trade and finance

Applying graphs to economics

Filters