Question 1

Which of the following is a major difference between the Japanese experience of the 1990s and the U.S.in 2008-2009?

Accepted Answer

A) The U.S.saving rate is much lower than that of Japan during the 1990s. 
B) The labor force of the U.S.is getting younger,while the labor force of Japan was aging. 
C) The U.S.responded to its downturn with considerable stimulus spending,while Japan failed to significantly increase government spending. 
D) In the U.S.the recession was the result of a severe downturn in real estate prices,while in Japan,a lengthy recession eventually led to a downturn in real estate prices. 
A) The U.S.saving rate is much lower than that of Japan during the 1990s. 
B) The labor force of the U.S.is getting younger,while the labor force of Japan was aging. 
C) The U.S.responded to its downturn with considerable stimulus spending,while Japan failed to significantly increase government spending. 
D) In the U.S.the recession was the result of a severe downturn in real estate prices,while in Japan,a lengthy recession eventually led to a downturn in real estate prices.

Question 2

In the latter part of the 1990s,Canada reduced government spending as a share of the economy and shifted the budget to a surplus.In the years that followed,the Canadian economy

Accepted Answer

A) experienced sharply higher rates of unemployment. 
B) grew more rapidly than any of the world's large high-income economies. 
C) experienced an economic slowdown that forced policy-makers to reverse the direction of fiscal policy. 
D) continued to experience slow economic growth,which explains why this period is now referred to as Canada's "lost decade." 
A) experienced sharply higher rates of unemployment. 
B) grew more rapidly than any of the world's large high-income economies. 
C) experienced an economic slowdown that forced policy-makers to reverse the direction of fiscal policy. 
D) continued to experience slow economic growth,which explains why this period is now referred to as Canada's "lost decade."

Question 3

Japan's increase in government spending financed by borrowing in response to the economic downturn and sluggish growth of the 1990s is most consistent with

Accepted Answer

A) the Keynesian view of appropriate fiscal policy. 
B) the supply-side view of appropriate fiscal policy. 
C) the crowding-out theory of fiscal policy. 
D) the view that the government should maintain a balanced budget. 
A) the Keynesian view of appropriate fiscal policy. 
B) the supply-side view of appropriate fiscal policy. 
C) the crowding-out theory of fiscal policy. 
D) the view that the government should maintain a balanced budget.

Question 4

Based on the Japanese experience of the 1990s,in the aftermath of the 2008-2009 recession,Americans can expect that

Accepted Answer

A) asset prices will quickly return to their pre-recession levels. 
B) fiscal stimulus will promote a quick,sustainable recovery. 
C) housing and stock market prices are unlikely to rebound quickly. 
D) expansionary monetary policy will result in a period of deflation. 
A) asset prices will quickly return to their pre-recession levels. 
B) fiscal stimulus will promote a quick,sustainable recovery. 
C) housing and stock market prices are unlikely to rebound quickly. 
D) expansionary monetary policy will result in a period of deflation.

Question 5

When confronting declining economic growth and recession during the 1990s,how did the Canadian response differ from that of Japan?

Accepted Answer

A) Canada reduced government spending and shifted the government budget toward a surplus;Japan did the opposite. 
B) Canada increased government spending and shifted the government budget toward a deficit;Japan did the opposite. 
C) Canada shifted to a highly restrictive monetary policy,while the monetary policy of Japan was highly expansionary. 
D) Canada increased tariffs and imposed trade restrictions;Japan did the opposite. 
A) Canada reduced government spending and shifted the government budget toward a surplus;Japan did the opposite. 
B) Canada increased government spending and shifted the government budget toward a deficit;Japan did the opposite. 
C) Canada shifted to a highly restrictive monetary policy,while the monetary policy of Japan was highly expansionary. 
D) Canada increased tariffs and imposed trade restrictions;Japan did the opposite.

Question 6

Which of the following combinations would have been most appropriate if Japanese policy-makers thought that both fiscal and monetary policy would provide demand stimulus and help promote recovery during the 1990s?

Accepted Answer

A) a decrease in government spending,combined with expansionary monetary policy 
B) an increase in government spending,combined with restrictive monetary policy 
C) both an increase in government spending and expansionary monetary policy 
D) both a decrease in government spending and restrictive monetary policy 
A) a decrease in government spending,combined with expansionary monetary policy 
B) an increase in government spending,combined with restrictive monetary policy 
C) both an increase in government spending and expansionary monetary policy 
D) both a decrease in government spending and restrictive monetary policy

Question 7

When the Bank of Japan reduced the discount rate from 5 percent to 2.5 percent in 1987,

Accepted Answer

A) both the demand for real estate and asset prices decreased dramatically. 
B) the demand for real estate increased,but asset prices decreased. 
C) the demand for real estate decreased,but asset prices increased. 
D) both the demand for real estate and asset prices increased dramatically. 
A) both the demand for real estate and asset prices decreased dramatically. 
B) the demand for real estate increased,but asset prices decreased. 
C) the demand for real estate decreased,but asset prices increased. 
D) both the demand for real estate and asset prices increased dramatically.

Question 8

Which of the following is a reason why the economic growth of a nation will slow as the population age 65 and older expands?

Accepted Answer

A) Older workers are better educated than younger workers. 
B) When the elderly increase as a share of the total population,this will increase government spending on health care and retirement benefits and lead to higher taxes on current workers. 
C) As people retire,high paying jobs are removed from the labor force and are replaced by low paying jobs. 
D) Even though their incomes are low,the elderly population will have to pay higher taxes in order to support younger workers. 
A) Older workers are better educated than younger workers. 
B) When the elderly increase as a share of the total population,this will increase government spending on health care and retirement benefits and lead to higher taxes on current workers. 
C) As people retire,high paying jobs are removed from the labor force and are replaced by low paying jobs. 
D) Even though their incomes are low,the elderly population will have to pay higher taxes in order to support younger workers.

Question 9

As the share of a nation's population age 65 and older expands,

Accepted Answer

A) the productivity growth of the population will tend to increase. 
B) the productivity growth of the population will tend to slow. 
C) the nation will become more productive as more jobs become available for younger workers. 
D) government expenditures on the elderly will decrease. 
A) the productivity growth of the population will tend to increase. 
B) the productivity growth of the population will tend to slow. 
C) the nation will become more productive as more jobs become available for younger workers. 
D) government expenditures on the elderly will decrease.

Question 10

During and following the severe recession of 2008-2009,the fiscal policy of the United States was

Accepted Answer

A) similar to the response of Japan to a severe recession during the early 1990s. 
B) similar to the response of Canada to an economic crisis during the latter half of the 1990s. 
C) dramatically different than the response of Japan to a severe recession during the early 1990s. 
D) similar to the highly successful fiscal policy of the United states during the 1990s: government expenditures were reduced as a share of GDP and the budget was shifted toward a surplus. 
A) similar to the response of Japan to a severe recession during the early 1990s. 
B) similar to the response of Canada to an economic crisis during the latter half of the 1990s. 
C) dramatically different than the response of Japan to a severe recession during the early 1990s. 
D) similar to the highly successful fiscal policy of the United states during the 1990s: government expenditures were reduced as a share of GDP and the budget was shifted toward a surplus.

Question 11

One advantage that Japan held during the recession of the 1990s over the U.S.recession in 2008-2009,was in its

Accepted Answer

A) fiscal policy response. 
B) rate of saving. 
C) aging of the labor force. 
D) flexibility of the labor market. 
A) fiscal policy response. 
B) rate of saving. 
C) aging of the labor force. 
D) flexibility of the labor market.

Question 12

Which of the following most accurately describes the correlation between the aging populations of the U.S.and Japan?

Accepted Answer

A) Japan's aging population follows a similar growth curve to that of the U.S. ,though there is about a 20-year lag behind the U.S. 
B) Japan and the U.S.have followed a similar growth curve of the elderly population since 1990. 
C) The U.S.is currently experiencing similar growth of the elderly population as a share of the total,such as Japan experienced during 1990-2010,though at a slower rate. 
D) The elderly population in the U.S.is projected to surpass that of Japan by the year 2020. 
A) Japan's aging population follows a similar growth curve to that of the U.S. ,though there is about a 20-year lag behind the U.S. 
B) Japan and the U.S.have followed a similar growth curve of the elderly population since 1990. 
C) The U.S.is currently experiencing similar growth of the elderly population as a share of the total,such as Japan experienced during 1990-2010,though at a slower rate. 
D) The elderly population in the U.S.is projected to surpass that of Japan by the year 2020.

Question 13

Which of the following is a similarity between Japan's response to the recession of the 1990s and the U.S.response to the Great Depression?

Accepted Answer

A) Both countries reduced government spending as a percentage of GDP significantly in response to the recessions. 
B) Both countries were able to utilize fiscal policy to significantly reduce unemployment during the recessions. 
C) Both countries followed a restrictive monetary policy during the recessions. 
D) Both countries tried to stimulate real output and aggregate demand by shifting to a more expansionary monetary policy. 
A) Both countries reduced government spending as a percentage of GDP significantly in response to the recessions. 
B) Both countries were able to utilize fiscal policy to significantly reduce unemployment during the recessions. 
C) Both countries followed a restrictive monetary policy during the recessions. 
D) Both countries tried to stimulate real output and aggregate demand by shifting to a more expansionary monetary policy.

Question 14

The major difference between Japan's response to the recession of the 1990s and the U.S.'s response to the recession of 2008-2009 was

Accepted Answer

A) the failure of Japan to adopt fiscal stimulus packages. 
B) Japan's more expansionary monetary policy. 
C) the balanced-budget policy followed by the United States. 
D) the more expansionary monetary policy followed by the United States. 
A) the failure of Japan to adopt fiscal stimulus packages. 
B) Japan's more expansionary monetary policy. 
C) the balanced-budget policy followed by the United States. 
D) the more expansionary monetary policy followed by the United States.

Question 15

Why does the Japanese experience of the 1990s offer some insight with regard to the 2008-2009 recession in the United States?

Accepted Answer

A) Japan was able to recover from World War II into an economic power and used a similar blueprint to recover from the recession in the 1990s. 
B) The structure of the Japanese labor market is much like that of the United States. 
C) Japan experienced a rapid increase in real estate and other asset prices followed by a sharp reduction in those prices much like the U.S.prior to 2008. 
D) Following the Japanese recession beginning in 1992,Japan used monetary and fiscal policy to effectively promote a quick recovery. 
A) Japan was able to recover from World War II into an economic power and used a similar blueprint to recover from the recession in the 1990s. 
B) The structure of the Japanese labor market is much like that of the United States. 
C) Japan experienced a rapid increase in real estate and other asset prices followed by a sharp reduction in those prices much like the U.S.prior to 2008. 
D) Following the Japanese recession beginning in 1992,Japan used monetary and fiscal policy to effectively promote a quick recovery.

Question 16

During the Japanese downturn of the early 1990s and the U.S.recession of 2008-2009,both countries

Accepted Answer

A) followed a highly expansionary monetary policy. 
B) raised taxes in order to balance the budget of the central government. 
C) followed a highly restrictive monetary policy. 
D) increased government spending and ran large budget deficits as a share of the economy. 
A) followed a highly expansionary monetary policy. 
B) raised taxes in order to balance the budget of the central government. 
C) followed a highly restrictive monetary policy. 
D) increased government spending and ran large budget deficits as a share of the economy.

Question 17

In the mid-1990s,Canada was experiencing large budget deficits,high levels of government expenditures as a share of the economy,and double-digit unemployment rates.Canadian policy-makers responded to this situation by

Accepted Answer

A) cutting taxes to stimulate aggregate demand and reduce unemployment. 
B) increasing government spending to stimulate aggregate demand and reduce unemployment. 
C) cutting government spending. 
D) shifting the budget toward a larger deficit. 
A) cutting taxes to stimulate aggregate demand and reduce unemployment. 
B) increasing government spending to stimulate aggregate demand and reduce unemployment. 
C) cutting government spending. 
D) shifting the budget toward a larger deficit.

Question 18

Why will persistently restrictive monetary policy often lead to low interest rates?

Accepted Answer

A) Decision-makers expect the inflation rate to rise,and this will reduce nominal interest rates. 
B) Decision-makers expect deflation,and this will keep nominal interest rates low. 
C) Decision-makers expect low rates of unemployment in the future and this will reduce nominal interest rates. 
D) Decision-makers expect higher stock prices in the future and this will reduce nominal interest rates. 
A) Decision-makers expect the inflation rate to rise,and this will reduce nominal interest rates. 
B) Decision-makers expect deflation,and this will keep nominal interest rates low. 
C) Decision-makers expect low rates of unemployment in the future and this will reduce nominal interest rates. 
D) Decision-makers expect higher stock prices in the future and this will reduce nominal interest rates.

Question 19

Both Japan and Canada experienced severe economic slowdowns during the 1990s.Which of the following is true of their fiscal policy responses and the results achieved?

Accepted Answer

A) Japan applied the Keynesian prescription of spending increases financed by borrowing and the Japanese economy grew rapidly during the 1990s. 
B) Canada reduced government spending as a share of the economy and shifted the budget toward a surplus;the Canadian economy grew rapidly during the decade that followed. 
C) Both Japan and Canada applied the Keynesian prescription of spending increases financed by borrowing and both achieved rapid growth during the decade that followed . 
D) Both Japan and Canada reduced government spending and shifted the budget toward a surplus and the result was a decade of stagnation and high unemployment. 
A) Japan applied the Keynesian prescription of spending increases financed by borrowing and the Japanese economy grew rapidly during the 1990s. 
B) Canada reduced government spending as a share of the economy and shifted the budget toward a surplus;the Canadian economy grew rapidly during the decade that followed. 
C) Both Japan and Canada applied the Keynesian prescription of spending increases financed by borrowing and both achieved rapid growth during the decade that followed . 
D) Both Japan and Canada reduced government spending and shifted the budget toward a surplus and the result was a decade of stagnation and high unemployment.

Question 20

Why is Japan's unemployment rate consistently well below the figures of most other high-income market economies,even during a recession?

Accepted Answer

A) The Japanese labor market is characterized by lifetime employment contracts,thus employees change jobs less frequently. 
B) Because of a more dynamic business environment and higher labor mobility,employees are able to switch and obtain jobs more frequently. 
C) The Japanese government regularly shifts resources to areas of high productivity by eliminating unprofitable enterprises. 
D) Japan follows a highly expansionary monetary policy,which keeps the unemployment rate low. 
A) The Japanese labor market is characterized by lifetime employment contracts,thus employees change jobs less frequently. 
B) Because of a more dynamic business environment and higher labor mobility,employees are able to switch and obtain jobs more frequently. 
C) The Japanese government regularly shifts resources to areas of high productivity by eliminating unprofitable enterprises. 
D) Japan follows a highly expansionary monetary policy,which keeps the unemployment rate low.

Exam 35: Lessons From Japan and Canada

Which of the following is a major difference between the Japanese experience of the 1990s and the U.S.in 2008-2009?

In the latter part of the 1990s,Canada reduced government spending as a share of the economy and shifted the budget to a surplus.In the years that followed,the Canadian economy

Japan's increase in government spending financed by borrowing in response to the economic downturn and sluggish growth of the 1990s is most consistent with

Based on the Japanese experience of the 1990s,in the aftermath of the 2008-2009 recession,Americans can expect that

When confronting declining economic growth and recession during the 1990s,how did the Canadian response differ from that of Japan?

Which of the following combinations would have been most appropriate if Japanese policy-makers thought that both fiscal and monetary policy would provide demand stimulus and help promote recovery during the 1990s?

When the Bank of Japan reduced the discount rate from 5 percent to 2.5 percent in 1987,

Which of the following is a reason why the economic growth of a nation will slow as the population age 65 and older expands?

As the share of a nation's population age 65 and older expands,

During and following the severe recession of 2008-2009,the fiscal policy of the United States was

One advantage that Japan held during the recession of the 1990s over the U.S.recession in 2008-2009,was in its

Which of the following most accurately describes the correlation between the aging populations of the U.S.and Japan?

Which of the following is a similarity between Japan's response to the recession of the 1990s and the U.S.response to the Great Depression?

The major difference between Japan's response to the recession of the 1990s and the U.S.'s response to the recession of 2008-2009 was

Why does the Japanese experience of the 1990s offer some insight with regard to the 2008-2009 recession in the United States?

During the Japanese downturn of the early 1990s and the U.S.recession of 2008-2009,both countries

In the mid-1990s,Canada was experiencing large budget deficits,high levels of government expenditures as a share of the economy,and double-digit unemployment rates.Canadian policy-makers responded to this situation by

Why will persistently restrictive monetary policy often lead to low interest rates?

Both Japan and Canada experienced severe economic slowdowns during the 1990s.Which of the following is true of their fiscal policy responses and the results achieved?

Why is Japan's unemployment rate consistently well below the figures of most other high-income market economies,even during a recession?

The Economic Approach

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The Economics of Collective Decision-Making

Ataking the Nations Economic Pulse

Economic Fluctuations, unemployment, and Inflation

Aan Introduction to Basic Macroeconomic Markets

Dynamic Change, economic Fluctuations, and the Ad-As Model

Fiscal Policy: the Keynesian View and Historical Perspective

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Modern Macroeconomics and Monetary Policy

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The Stock Market: Its Function, Performance, and Potential As an Investment Opportunity

Great Debates in Economics: Keynes Versus Hayek

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Lessons From the Great Depression

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