Question 1

The key to sustained economic growth is increasing labor productivity.

Accepted Answer

A) True 
 B)False

Question 2

If government purchases are $400 million,taxes are $700 million,and transfers are $200 million,which of the following is true?

Accepted Answer

A) Public saving is $500 million. 
B) The budget deficit is $100 million. 
C) The budget deficit is $500 million. 
D) Public saving is $100 million. 
A) Public saving is $500 million. 
B) The budget deficit is $100 million. 
C) The budget deficit is $500 million. 
D) Public saving is $100 million.

Question 3

Figure 14-1
  
-Refer to Figure 14-1.Which of the following is consistent with the graph depicted above?

Accepted Answer

A) An expected recession decreases the profitability of new investment. 
B) Technological change increases the profitability of new investment. 
C) The government runs a budget surplus. 
D) Households become spendthrifts and begin to save less. 
A) An expected recession decreases the profitability of new investment. 
B) Technological change increases the profitability of new investment. 
C) The government runs a budget surplus. 
D) Households become spendthrifts and begin to save less.

Question 4

Increases in capital per hour worked cannot sustain high rates of economic growth unless accompanied by technological change.

Accepted Answer

A) True 
 B)False

Question 5

________ are financial securities that represent promises to repay a fixed amount of funds.

Accepted Answer

A) Stocks 
B) Bonds 
C) Interest rates 
D) Mutual funds 
A) Stocks 
B) Bonds 
C) Interest rates 
D) Mutual funds

Question 6

________ is the ease with which a financial security can be exchanged for money.

Accepted Answer

A) Risk 
B) The face value 
C) Liquidity 
D) The rate of return 
A) Risk 
B) The face value 
C) Liquidity 
D) The rate of return

Question 7

When the economy reaches a trough in a business cycle,which of the following will occur?

Accepted Answer

A) Income, production, and employment will continue to fall. 
B) Income, production, and employment will begin to rise. 
C) Income and production will rise, but employment will continue to fall. 
D) Employment rises, but income and production will continue to fall. 
A) Income, production, and employment will continue to fall. 
B) Income, production, and employment will begin to rise. 
C) Income and production will rise, but employment will continue to fall. 
D) Employment rises, but income and production will continue to fall.

Question 8

Increasing the amount of consumption spending and reducing the amount of savings ________ investment expenditures,and ________ long-run economic growth in the economy.

Accepted Answer

A) increases; increases 
B) increases; decreases 
C) decreases; increases 
D) decreases; decreases 
A) increases; increases 
B) increases; decreases 
C) decreases; increases 
D) decreases; decreases

Question 9

Economist Steve Landsburg has pointed out that Ebenezer Scrooge's change in behavior from miser to spender might actually be detrimental to the economy because

Accepted Answer

A) Scrooge's miserly saving helped contribute to the production of investment goods rather than consumption goods. 
B) Scrooge was happiest when he was saving money, and happiness is the key to economic growth. 
C) saving has to be greater than consumption for the economy to grow. 
D) Scrooge's consumption habits were more detrimental to the environment than were his earlier saving habits. 
A) Scrooge's miserly saving helped contribute to the production of investment goods rather than consumption goods. 
B) Scrooge was happiest when he was saving money, and happiness is the key to economic growth. 
C) saving has to be greater than consumption for the economy to grow. 
D) Scrooge's consumption habits were more detrimental to the environment than were his earlier saving habits.

Question 10

Suppose you are an advisor to the Business Cycle Dating Committee.You are asked to look at macroeconomic data to evaluate whether the economy has entered a recession this year.Which data do you look at? How does the economy behave at the onset of a recession?

Accepted Answer

Since a recession is defined as signific

Question 11

Using the market for loanable funds,which of the following has the potential to raise the real interest rate?

Accepted Answer

A) an increase in the demand for loanable funds 
B) an increase in the quantity of loanable funds demanded 
C) an increase in the supply of loanable funds 
D) an increase in the quantity of loanable funds supplied 
A) an increase in the demand for loanable funds 
B) an increase in the quantity of loanable funds demanded 
C) an increase in the supply of loanable funds 
D) an increase in the quantity of loanable funds supplied

Question 12

The U.S.economy has been more stable since 1950.

Accepted Answer

A) True 
 B)False

Question 13

If an economy is growing at a rate of 2.5% per year,how long will it take the economy to double in size?

Accepted Answer

A) 60 years 
B) 43 years 
C) 36 years 
D) 28 years 
A) 60 years 
B) 43 years 
C) 36 years 
D) 28 years

Question 14

In a closed economy,what is the relationship between saving and investment?

Accepted Answer

A) Saving is greater than investment. 
B) investment is greater than saving. 
C) Investment is equal to saving. 
D) Investment may be greater or smaller than saving. 
A) Saving is greater than investment. 
B) investment is greater than saving. 
C) Investment is equal to saving. 
D) Investment may be greater or smaller than saving.

Question 15

Which of the following explains the cause of the change in the unemployment rate at the end of a recession?

Accepted Answer

A) Firms are hesitant to rehire laid off workers as they continue to operate below capacity. 
B) Firms rapidly hire new workers at the first sign of on an increase in demand for their goods. 
C) Discouraged workers return to the labor force and this makes the unemployment rate fall. 
D) Discouraged workers leave the labor force and this makes the unemployment rate rise. 
A) Firms are hesitant to rehire laid off workers as they continue to operate below capacity. 
B) Firms rapidly hire new workers at the first sign of on an increase in demand for their goods. 
C) Discouraged workers return to the labor force and this makes the unemployment rate fall. 
D) Discouraged workers leave the labor force and this makes the unemployment rate rise.

Question 16

A financial intermediary's main function is to match ________ with excess funds to ________ with a shortage of funds.

Accepted Answer

A) savers; borrower 
B) borrower; savers 
C) governments; households 
D) firms; insurance companies 
A) savers; borrower 
B) borrower; savers 
C) governments; households 
D) firms; insurance companies

Question 17

Typically,as an economy begins to emerge from a recessionary phase of the business cycle

Accepted Answer

A) unemployment falls immediately. 
B) unemployment continues to rise. 
C) inflation begins to fall. 
D) investment begins to fall. 
A) unemployment falls immediately. 
B) unemployment continues to rise. 
C) inflation begins to fall. 
D) investment begins to fall.

Question 18

If the growth rate of real GDP rises from 3% to 4% per year,then the number of years required to double real GDP will decrease from

Accepted Answer

A) 23.3 years to 17.5 years. 
B) 28.0 years to 21.0 years. 
C) 11.2 years to 10.8 years. 
D) 23.3 years to 20.6 years. 
A) 23.3 years to 17.5 years. 
B) 28.0 years to 21.0 years. 
C) 11.2 years to 10.8 years. 
D) 23.3 years to 20.6 years.

Question 19

Liquidity refers to

Accepted Answer

A) the ease with a stock can be traded for a bond. 
B) the ease with which a financial security can be traded for cash. 
C) the number of times a dollar changes hands in the creation of GDP in an economy. 
D) the number of shares of stock a corporation issues. 
A) the ease with a stock can be traded for a bond. 
B) the ease with which a financial security can be traded for cash. 
C) the number of times a dollar changes hands in the creation of GDP in an economy. 
D) the number of shares of stock a corporation issues.

Question 20

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

Accepted Answer

A) lasted 12 months. 
B) lasted 18 months. 
C) lasted 27 months. 
D) had not ended by December 2011. 
A) lasted 12 months. 
B) lasted 18 months. 
C) lasted 27 months. 
D) had not ended by December 2011.

The key to sustained economic growth is increasing labor productivity.

If government purchases are $400 million,taxes are $700 million,and transfers are $200 million,which of the following is true?

Figure 14-1 -Refer to Figure 14-1.Which of the following is consistent with the graph depicted above?

Increases in capital per hour worked cannot sustain high rates of economic growth unless accompanied by technological change.

________ are financial securities that represent promises to repay a fixed amount of funds.

________ is the ease with which a financial security can be exchanged for money.

When the economy reaches a trough in a business cycle,which of the following will occur?

Increasing the amount of consumption spending and reducing the amount of savings investment expenditures,and long-run economic growth in the economy.

Economist Steve Landsburg has pointed out that Ebenezer Scrooge's change in behavior from miser to spender might actually be detrimental to the economy because

Suppose you are an advisor to the Business Cycle Dating Committee.You are asked to look at macroeconomic data to evaluate whether the economy has entered a recession this year.Which data do you look at? How does the economy behave at the onset of a recession?

Using the market for loanable funds,which of the following has the potential to raise the real interest rate?

The U.S.economy has been more stable since 1950.

If an economy is growing at a rate of 2.5% per year,how long will it take the economy to double in size?

In a closed economy,what is the relationship between saving and investment?

Which of the following explains the cause of the change in the unemployment rate at the end of a recession?

A financial intermediary's main function is to match with excess funds to with a shortage of funds.

Typically,as an economy begins to emerge from a recessionary phase of the business cycle

If the growth rate of real GDP rises from 3% to 4% per year,then the number of years required to double real GDP will decrease from

Liquidity refers to

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

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

Exam 14: Economic Growth, the Financial System, and Business Cycles

The key to sustained economic growth is increasing labor productivity.

If government purchases are $400 million,taxes are $700 million,and transfers are $200 million,which of the following is true?

Figure 14-1 -Refer to Figure 14-1.Which of the following is consistent with the graph depicted above?

Increases in capital per hour worked cannot sustain high rates of economic growth unless accompanied by technological change.

________ are financial securities that represent promises to repay a fixed amount of funds.

________ is the ease with which a financial security can be exchanged for money.

When the economy reaches a trough in a business cycle,which of the following will occur?

Increasing the amount of consumption spending and reducing the amount of savings ________ investment expenditures,and ________ long-run economic growth in the economy.

Economist Steve Landsburg has pointed out that Ebenezer Scrooge's change in behavior from miser to spender might actually be detrimental to the economy because

Suppose you are an advisor to the Business Cycle Dating Committee.You are asked to look at macroeconomic data to evaluate whether the economy has entered a recession this year.Which data do you look at? How does the economy behave at the onset of a recession?

Using the market for loanable funds,which of the following has the potential to raise the real interest rate?

The U.S.economy has been more stable since 1950.

If an economy is growing at a rate of 2.5% per year,how long will it take the economy to double in size?

In a closed economy,what is the relationship between saving and investment?

Which of the following explains the cause of the change in the unemployment rate at the end of a recession?

A financial intermediary's main function is to match ________ with excess funds to ________ with a shortage of funds.

Typically,as an economy begins to emerge from a recessionary phase of the business cycle

If the growth rate of real GDP rises from 3% to 4% per year,then the number of years required to double real GDP will decrease from

Liquidity refers to

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

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

Increasing the amount of consumption spending and reducing the amount of savings investment expenditures,and long-run economic growth in the economy.

A financial intermediary's main function is to match with excess funds to with a shortage of funds.