Question 1

Japan's expansionary fiscal policy during the 1990s resulted in

Accepted Answer

A) an increase in the national debt,but economic growth was weak. 
B) strong growth of real output,but the national debt was relatively constant as a share of GDP. 
C) a quick recovery,but no increases in stock market and real estate prices. 
D) a large increase in stock market and real estate prices,but slow growth of real GDP. 
A) an increase in the national debt,but economic growth was weak. 
B) strong growth of real output,but the national debt was relatively constant as a share of GDP. 
C) a quick recovery,but no increases in stock market and real estate prices. 
D) a large increase in stock market and real estate prices,but slow growth of real GDP.

Question 2

Which one of the following is true of the Canadian fiscal policy of the late 1990s?

Accepted Answer

A) Canada shifted its budget toward a deficit in the late 1990s and experienced strong growth in the years that followed. 
B) Canada shifted its budget toward a surplus in the late 1990s and experienced strong growth in the years that followed. 
C) Canada's fiscal policy was highly expansionary during the latter half of the 1990s and the inflation rate rose sharply in the years that followed. 
D) Canada reduced government spending as a share of the economy,but the policy was soon reversed as the rate of unemployment rose to higher and higher levels. 
A) Canada shifted its budget toward a deficit in the late 1990s and experienced strong growth in the years that followed. 
B) Canada shifted its budget toward a surplus in the late 1990s and experienced strong growth in the years that followed. 
C) Canada's fiscal policy was highly expansionary during the latter half of the 1990s and the inflation rate rose sharply in the years that followed. 
D) Canada reduced government spending as a share of the economy,but the policy was soon reversed as the rate of unemployment rose to higher and higher levels.

Question 3

Since Japan's stock market crash in 1990,its stock market has

Accepted Answer

A) reach the pre-crash levels several times,but it has been unable to maintain those high levels. 
B) fluctuated,but stock prices have remained well below their peak level prior to the crash. 
C) recovered most of its pre-crash value. 
D) fluctuated for several years,but a strong upward trend has been present since 1995. 
A) reach the pre-crash levels several times,but it has been unable to maintain those high levels. 
B) fluctuated,but stock prices have remained well below their peak level prior to the crash. 
C) recovered most of its pre-crash value. 
D) fluctuated for several years,but a strong upward trend has been present since 1995.

Question 4

As the share of population age 65 and older expands in high-income countries like Japan and the United States,

Accepted Answer

A) the tax burden on current workers will tend to decrease. 
B) the tax burden on current workers will tend to increase. 
C) the productivity of the population will tend to increase,leading to higher rates of economic growth. 
D) government expenditures on health care and retirement benefits for the elderly will tend to decrease. 
A) the tax burden on current workers will tend to decrease. 
B) the tax burden on current workers will tend to increase. 
C) the productivity of the population will tend to increase,leading to higher rates of economic growth. 
D) government expenditures on health care and retirement benefits for the elderly will tend to decrease.

Question 5

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

Accepted Answer

A) Stable real estate and stock market prices eventually led to an economic downturn. 
B) Both Japan and the U.S.tightened lending standards and this eventually led to a substantial decline in real estate prices. 
C) The collapse of stock and real estate prices led to the failure of highly leveraged banking and financial institutions. 
D) Neither Japan nor the U.S.had experienced a recession since the time of the Great Depression. 
A) Stable real estate and stock market prices eventually led to an economic downturn. 
B) Both Japan and the U.S.tightened lending standards and this eventually led to a substantial decline in real estate prices. 
C) The collapse of stock and real estate prices led to the failure of highly leveraged banking and financial institutions. 
D) Neither Japan nor the U.S.had experienced a recession since the time of the Great Depression.

Question 6

Which of the following is evidence of Japan's expansionary fiscal policy during the 1990s?

Accepted Answer

A) persistent budget surpluses throughout the decade 
B) persistently large budget deficits throughout the decade 
C) a gradual decrease in Japan's national debt during the 1990s 
D) a gradual decrease in Japan's government expenditures as a share of GDP during the 1990s 
A) persistent budget surpluses throughout the decade 
B) persistently large budget deficits throughout the decade 
C) a gradual decrease in Japan's national debt during the 1990s 
D) a gradual decrease in Japan's government expenditures as a share of GDP during the 1990s

Question 7

Canada had a high rate of unemployment and sluggish economy during the first half of the 1990s.During the latter half of the 1990s,Canada

Accepted Answer

A) reduced government spending as a share of the economy,shifted the budget toward a surplus,and the economy achieved solid economic growth in the years that followed. 
B) increased government spending as a share of the economy,shifted the budget toward a deficit,and the economy achieved solid economic growth in the years that followed. 
C) reduced government spending as a share of the economy,shifted the budget toward a surplus,and the economy quickly fell into a severe recession. 
D) increased government spending as a share of the economy,shifted the budget toward a deficit,and the inflation rate soared to double-digit levels. 
A) reduced government spending as a share of the economy,shifted the budget toward a surplus,and the economy achieved solid economic growth in the years that followed. 
B) increased government spending as a share of the economy,shifted the budget toward a deficit,and the economy achieved solid economic growth in the years that followed. 
C) reduced government spending as a share of the economy,shifted the budget toward a surplus,and the economy quickly fell into a severe recession. 
D) increased government spending as a share of the economy,shifted the budget toward a deficit,and the inflation rate soared to double-digit levels.

Question 8

The deflationary conditions in Japan from 1995 to 2002 were a result of

Accepted Answer

A) a rapid expansion in the money supply. 
B) highly restrictive monetary policy. 
C) a decline in government spending as a percent of GDP. 
D) the persistently large budget surpluses of the central government. 
A) a rapid expansion in the money supply. 
B) highly restrictive monetary policy. 
C) a decline in government spending as a percent of GDP. 
D) the persistently large budget surpluses of the central government.

Question 9

Even if the expansionary monetary policy of the Fed leads to a strong recovery from the recession of 2008-2009,

Accepted Answer

A) the general level of prices will fall in the decade immediately ahead. 
B) the Japanese experience indicates that expansionary monetary policy will not lead to long-term recovery. 
C) time lags between changes in monetary policy and when the changes exert an impact will make it difficult to promote long-term economic stability. 
D) asset prices will quickly return to their pre-recession levels,but this will cause another crash in housing and stock prices. 
A) the general level of prices will fall in the decade immediately ahead. 
B) the Japanese experience indicates that expansionary monetary policy will not lead to long-term recovery. 
C) time lags between changes in monetary policy and when the changes exert an impact will make it difficult to promote long-term economic stability. 
D) asset prices will quickly return to their pre-recession levels,but this will cause another crash in housing and stock prices.

Question 10

Which of the following led to a strong demand for commercial real estate in Japan in the mid-1980s,resulting in soaring real estate prices?

Accepted Answer

A) low interest rates set by the Bank of Japan combined with optimism of continued strong economic growth 
B) high interest rates of the period along with the adoption of higher credit and borrowing standards 
C) stagnant stock market prices that induced investors to shift investments from stocks to real estate 
D) a historically-sluggish economy that was showing signs of recovery and future economic growth 
A) low interest rates set by the Bank of Japan combined with optimism of continued strong economic growth 
B) high interest rates of the period along with the adoption of higher credit and borrowing standards 
C) stagnant stock market prices that induced investors to shift investments from stocks to real estate 
D) a historically-sluggish economy that was showing signs of recovery and future economic growth

Question 11

If interest rates fall to near zero and consumers expect a decline in the price levels in the coming year,what would this indicate?

Accepted Answer

A) highly expansionary monetary policy 
B) restrictive monetary policy,but an anticipation of future inflationary conditions 
C) highly restrictive monetary policy and an anticipation of deflation in the future 
D) an unanticipated decrease in the money supply 
A) highly expansionary monetary policy 
B) restrictive monetary policy,but an anticipation of future inflationary conditions 
C) highly restrictive monetary policy and an anticipation of deflation in the future 
D) an unanticipated decrease in the money supply

Question 12

Following World War II,Japan's GDP grew at an annual rate of about _________,but in the decade following the stock market crash in 1990,Japan's GDP grew at an annual rate of about _________.(Fill in the blanks)

Accepted Answer

A) 1 percent;6 percent 
B) 6 percent;1 percent 
C) 5 percent;-5 percent 
D) 3 percent;10 percent 
A) 1 percent;6 percent 
B) 6 percent;1 percent 
C) 5 percent;-5 percent 
D) 3 percent;10 percent

Exam 35: Lessons From Japan and Canada

Japan's expansionary fiscal policy during the 1990s resulted in

Which one of the following is true of the Canadian fiscal policy of the late 1990s?

Since Japan's stock market crash in 1990,its stock market has

As the share of population age 65 and older expands in high-income countries like Japan and the United States,

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

Which of the following is evidence of Japan's expansionary fiscal policy during the 1990s?

Canada had a high rate of unemployment and sluggish economy during the first half of the 1990s.During the latter half of the 1990s,Canada

The deflationary conditions in Japan from 1995 to 2002 were a result of

Even if the expansionary monetary policy of the Fed leads to a strong recovery from the recession of 2008-2009,

Which of the following led to a strong demand for commercial real estate in Japan in the mid-1980s,resulting in soaring real estate prices?

If interest rates fall to near zero and consumers expect a decline in the price levels in the coming year,what would this indicate?

Following World War II,Japan's GDP grew at an annual rate of about _________,but in the decade following the stock market crash in 1990,Japan's GDP grew at an annual rate of about _________.(Fill in the blanks)

The Economic Approach

Asome Tools of the Economist

Asupply,demand,and the Market Process

Asupply and Demand: Applications and Extensions

Difficult Cases for the Market and the Role of Government

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

Fiscal Policy, incentives, and Secondary Effects

Amoney and the Banking System

Modern Macroeconomics and Monetary Policy

Stabilization Policy, output, and Employment

Creating an Environment for Growth and Prosperity

Institutions,policies,and Cross-Country Differences in Income and Growth

Gaining From International Trade

International Finance and the Foreign Exchange Market

Consumer Choice and Elasticity

Acosts and the Supply of Goods

Aprice Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Aprice-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Government Spending and Taxation

The Economics of Social Security

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

Great Debates in Economics: Keynes Versus Hayek

The Crisis of 2008: Causes and Lessons for the Future

Lessons From the Great Depression

The Federal Budget and the National Debt

The Economics of Healthcare

Education: Problems and Performance

Earnings Differences Between Men and Women

Do Labor Unions Increase the Wages of Workers

The Question of Resource Exhaustion

Difficult Environmental Cases and the Role of Government

Filters

Following World War II,Japan's GDP grew at an annual rate of about _,but in the decade following the stock market crash in 1990,Japan's GDP grew at an annual rate of about _.(Fill in the blanks)