Question 1

Which of the following would you expect to increase the equilibrium interest rate?

Accepted Answer

A) an increase in the percentage of income after net taxes that households save 
B) an increase in the budget deficit 
C) a decrease in the profitability of investment projects firms are considering 
D) a change from an income tax to a consumption tax 
A) an increase in the percentage of income after net taxes that households save 
B) an increase in the budget deficit 
C) a decrease in the profitability of investment projects firms are considering 
D) a change from an income tax to a consumption tax

Question 2

The demand for loanable funds is determined by the willingness of ________ to borrow money to engage in new investment projects.

Accepted Answer

A) government 
B) households 
C) banks 
D) firms 
A) government 
B) households 
C) banks 
D) firms

Question 3

Inflation usually increases during a recession and decreases during an expansion.

Accepted Answer

A) True 
 B)False

Question 4

Potential GDP is estimated to grow at a rate of 3.2% in the United States.Actual GDP in the U.S.

Accepted Answer

A) always grows at a slower rate than potential GDP. 
B) always grows at a faster rate than potential GDP. 
C) always grows at the same rate as potential GDP. 
D) is the same as potential GDP if all firms in the economy were working at capacity. 
A) always grows at a slower rate than potential GDP. 
B) always grows at a faster rate than potential GDP. 
C) always grows at the same rate as potential GDP. 
D) is the same as potential GDP if all firms in the economy were working at capacity.

Question 5

For the recessions in the United States since the 1950s

Accepted Answer

A) inflation has been nonexistent. 
B) the inflation rate rises on average by about 2.5 percentage points 12 months after a recession begins. 
C) the inflation rate falls on average by about 2.5 percentage points 12 months after a recession begins. 
D) deflation occurs. 
A) inflation has been nonexistent. 
B) the inflation rate rises on average by about 2.5 percentage points 12 months after a recession begins. 
C) the inflation rate falls on average by about 2.5 percentage points 12 months after a recession begins. 
D) deflation occurs.

Question 6

An increase in the demand for loanable funds will occur if there is

Accepted Answer

A) an increase in the real interest rate. 
B) a decrease in the real interest rate. 
C) an increase in expected profits from firm investment projects. 
D) an increase in the nominal interest rate accompanied by an equal increase in inflation. 
A) an increase in the real interest rate. 
B) a decrease in the real interest rate. 
C) an increase in expected profits from firm investment projects. 
D) an increase in the nominal interest rate accompanied by an equal increase in inflation.

Question 7

Which of the following would increase public saving?

Accepted Answer

A) an increase in taxes 
B) an increase in transfers 
C) an increase in government purchases 
D) All of the above would increase public saving. 
A) an increase in taxes 
B) an increase in transfers 
C) an increase in government purchases 
D) All of the above would increase public saving.

Question 8

Explain and show graphically how a decrease in household saving affects the equilibrium interest rate and the equilibrium quantity of loanable funds.

Accepted Answer

A decrease in household saving decreases

Question 9

Suppose that real GDP for 2012 was $10,000 billion and real GDP for 2013 was $9,500 billion.What is the rate of growth of real GDP between 2012 and 2013?

Accepted Answer

A) -10% 
B) -5% 
C) -2% 
D) -1% 
A) -10% 
B) -5% 
C) -2% 
D) -1%

Question 10

Since 1950,expansions in the United States have become ________,while recessions have become ________.

Accepted Answer

A) longer; longer 
B) shorter; shorter 
C) shorter; longer 
D) longer; shorter 
A) longer; longer 
B) shorter; shorter 
C) shorter; longer 
D) longer; shorter

Question 11

Which of the following is a correct statement?

Accepted Answer

A) Inflation is measured as the percent change in the CPI. 
B) The CPI is a widely used measure of the inflation rate. 
C) Real GDP is our best measure of economic growth. 
D) The PPI measures inflation as experienced by producers. 
A) Inflation is measured as the percent change in the CPI. 
B) The CPI is a widely used measure of the inflation rate. 
C) Real GDP is our best measure of economic growth. 
D) The PPI measures inflation as experienced by producers.

Question 12

Figure 14-4
  
-Refer to Figure 14-4.Which of the following is consistent with the graph depicted?

Accepted Answer

A) an increase in household income 
B) an increase in transfer payments to households 
C) an increase in the proportion of income after net taxes used for consumption 
D) an increase in tax revenues collected by the government 
A) an increase in household income 
B) an increase in transfer payments to households 
C) an increase in the proportion of income after net taxes used for consumption 
D) an increase in tax revenues collected by the government

Question 13

According to Robert Fogel,economic growth ________ health,and health ________ economic growth.

Accepted Answer

A) improves; worsens 
B) improves; improves 
C) worsens; improves 
D) worsens; worsens 
A) improves; worsens 
B) improves; improves 
C) worsens; improves 
D) worsens; worsens

Question 14

What is the name of the organization that defines business cycle peaks and troughs in the United States?

Accepted Answer

A) the Bureau of Labor Statistics 
B) the Federal Reserve 
C) the National Bureau of Economic Research 
D) the National Peak and Trough Committee 
A) the Bureau of Labor Statistics 
B) the Federal Reserve 
C) the National Bureau of Economic Research 
D) the National Peak and Trough Committee

Question 15

Which of the following does not describe governmental policy actions that are helpful in supporting growth in an economy? Governmental policies that

Accepted Answer

A) avoid playing any role in developing communication systems. 
B) provide secure rights to private property. 
C) establish an independent court system that enforces contracts. 
D) facilitate the development of an efficient financial system. 
A) avoid playing any role in developing communication systems. 
B) provide secure rights to private property. 
C) establish an independent court system that enforces contracts. 
D) facilitate the development of an efficient financial system.

Question 16

In a closed economy,which of the following components of GDP is not included?

Accepted Answer

A) investment 
B) government spending 
C) net exports 
D) consumption 
A) investment 
B) government spending 
C) net exports 
D) consumption

Question 17

An increase in the real interest rate results in which of the following?

Accepted Answer

A) an increase in the demand for loanable funds 
B) a decrease in the demand for loanable funds 
C) an increase in the quantity of loanable funds supplied 
D) Both B and C will occur as a result of an increase in the real interest rate. 
A) an increase in the demand for loanable funds 
B) a decrease in the demand for loanable funds 
C) an increase in the quantity of loanable funds supplied 
D) Both B and C will occur as a result of an increase in the real interest rate.

Question 18

Use the rule of 70 to illustrate how small differences in growth rates can have a large impact on how rapidly the standard of living in a country increases.

Accepted Answer

The rule of 70 refers to a calculation t

Question 19

The supply of loanable funds has a ________ slope because the greater the interest rate,the ________ the reward to saving,and the ________ the quantity of loanable funds supplied.

Accepted Answer

A) positive; lesser; lesser 
B) positive; greater; lesser 
C) negative; lesser; greater 
D) positive; greater; greater 
A) positive; lesser; lesser 
B) positive; greater; lesser 
C) negative; lesser; greater 
D) positive; greater; greater

Question 20

If you invest $10,000 in a bond that earns 8% interest per year,how many years will it take to double your money?

Accepted Answer

A) 1 year and 3 months 
B) 2 years and 6 months 
C) 8 years 
D) 8 years and 9 months 
A) 1 year and 3 months 
B) 2 years and 6 months 
C) 8 years 
D) 8 years and 9 months

Which of the following would you expect to increase the equilibrium interest rate?

The demand for loanable funds is determined by the willingness of ________ to borrow money to engage in new investment projects.

Inflation usually increases during a recession and decreases during an expansion.

Potential GDP is estimated to grow at a rate of 3.2% in the United States.Actual GDP in the U.S.

For the recessions in the United States since the 1950s

An increase in the demand for loanable funds will occur if there is

Which of the following would increase public saving?

Explain and show graphically how a decrease in household saving affects the equilibrium interest rate and the equilibrium quantity of loanable funds.

Suppose that real GDP for 2012 was $10,000 billion and real GDP for 2013 was $9,500 billion.What is the rate of growth of real GDP between 2012 and 2013?

Since 1950,expansions in the United States have become ,while recessions have become .

Which of the following is a correct statement?

Figure 14-4 -Refer to Figure 14-4.Which of the following is consistent with the graph depicted?

According to Robert Fogel,economic growth health,and health economic growth.

What is the name of the organization that defines business cycle peaks and troughs in the United States?

Which of the following does not describe governmental policy actions that are helpful in supporting growth in an economy? Governmental policies that

In a closed economy,which of the following components of GDP is not included?

An increase in the real interest rate results in which of the following?

Use the rule of 70 to illustrate how small differences in growth rates can have a large impact on how rapidly the standard of living in a country increases.

The supply of loanable funds has a slope because the greater the interest rate,the the reward to saving,and the the quantity of loanable funds supplied.

If you invest $10,000 in a bond that earns 8% interest per year,how many years will it take to double your money?

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

Which of the following would you expect to increase the equilibrium interest rate?

The demand for loanable funds is determined by the willingness of ________ to borrow money to engage in new investment projects.

Inflation usually increases during a recession and decreases during an expansion.

Potential GDP is estimated to grow at a rate of 3.2% in the United States.Actual GDP in the U.S.

For the recessions in the United States since the 1950s

An increase in the demand for loanable funds will occur if there is

Which of the following would increase public saving?

Explain and show graphically how a decrease in household saving affects the equilibrium interest rate and the equilibrium quantity of loanable funds.

Suppose that real GDP for 2012 was $10,000 billion and real GDP for 2013 was $9,500 billion.What is the rate of growth of real GDP between 2012 and 2013?

Since 1950,expansions in the United States have become ________,while recessions have become ________.

Which of the following is a correct statement?

Figure 14-4 -Refer to Figure 14-4.Which of the following is consistent with the graph depicted?

According to Robert Fogel,economic growth ________ health,and health ________ economic growth.

What is the name of the organization that defines business cycle peaks and troughs in the United States?

Which of the following does not describe governmental policy actions that are helpful in supporting growth in an economy? Governmental policies that

In a closed economy,which of the following components of GDP is not included?

An increase in the real interest rate results in which of the following?

Use the rule of 70 to illustrate how small differences in growth rates can have a large impact on how rapidly the standard of living in a country increases.

The supply of loanable funds has a ________ slope because the greater the interest rate,the ________ the reward to saving,and the ________ the quantity of loanable funds supplied.

If you invest $10,000 in a bond that earns 8% interest per year,how many years will it take to double your money?

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

Since 1950,expansions in the United States have become ,while recessions have become .

According to Robert Fogel,economic growth health,and health economic growth.

The supply of loanable funds has a slope because the greater the interest rate,the the reward to saving,and the the quantity of loanable funds supplied.