Question 1

If Ebenezer Scrooge spends rather than saves his vast wealth he will

Accepted Answer

A) slow economic growth because he is reducing the amount of funds available for investment. 
B) slow economic growth because he is increasing the amount of funds available for investment. 
C) promote economic growth because he is increasing the amount of funds available for investment. 
D) promote economic growth because he is decreasing the amount of funds available for investment. 
A) slow economic growth because he is reducing the amount of funds available for investment. 
B) slow economic growth because he is increasing the amount of funds available for investment. 
C) promote economic growth because he is increasing the amount of funds available for investment. 
D) promote economic growth because he is decreasing the amount of funds available for investment.

Question 2

Figure 14-6
  
-Refer to Figure 14-6.The loanable funds market is in equilibrium,as shown in the figure above.An increase in the supply of loanable funds could result in which of the following combinations of the real interest rate and quantity of loanable funds at a new equilibrium?

Accepted Answer

A) The real interest rate is 5 percent, and the quantity of loanable funds is $150 million. 
B) The real interest rate is 5 percent, and the quantity of loanable funds is $90 million. 
C) The real interest rate is 3 percent, and the quantity of loanable funds is $150 million. 
D) The real interest rate is 3 percent, and the quantity of loanable funds is $90 million. 
A) The real interest rate is 5 percent, and the quantity of loanable funds is $150 million. 
B) The real interest rate is 5 percent, and the quantity of loanable funds is $90 million. 
C) The real interest rate is 3 percent, and the quantity of loanable funds is $150 million. 
D) The real interest rate is 3 percent, and the quantity of loanable funds is $90 million.

Question 3

Figure 14-3
  
-Refer to Figure 14-3.Which of the following is consistent with the graph depicted above?

Accepted Answer

A) Taxes are changed so that real interest income is taxed rather than nominal interest income. 
B) An expected recession decreases the profitability of new investment. 
C) The government runs a budget deficit. 
D) Technological change increases the profitability of new investment. 
A) Taxes are changed so that real interest income is taxed rather than nominal interest income. 
B) An expected recession decreases the profitability of new investment. 
C) The government runs a budget deficit. 
D) Technological change increases the profitability of new investment.

Question 4

The federal budget deficit can be reduced by

Accepted Answer

A) raising taxes. 
B) raising government spending. 
C) raising transfer payments. 
D) higher interest rates. 
A) raising taxes. 
B) raising government spending. 
C) raising transfer payments. 
D) higher interest rates.

Question 5

There is public dissaving if

Accepted Answer

A) G + TR > T. B) G + TR G + T. D) TR < G + T. A) G + TR > T. B) G + TR G + T. D) TR < G + T.

Question 6

How will an increase in the government budget surplus as a result of lower government spending (with no change in net taxes)affect private saving in the economy?

Accepted Answer

A) Private saving will increase by the amount of increase in the budget surplus. 
B) Private saving will decrease by the amount of increase in the budget surplus. 
C) Private saving will decrease by less than the amount of increase in the budget surplus. 
D) Private saving will be unaffected by the increase in the budget surplus. 
A) Private saving will increase by the amount of increase in the budget surplus. 
B) Private saving will decrease by the amount of increase in the budget surplus. 
C) Private saving will decrease by less than the amount of increase in the budget surplus. 
D) Private saving will be unaffected by the increase in the budget surplus.

Question 7

Scenario 14-1
Consider the following data for a closed economy:
Y = $12 trillion
C = $8 trillion
I= $2 trillion
G = $2 trillion
TR = $2 trillion
T = $3 trillion
-Refer to Scenario 14-1.Based on the information above,what is the level of private saving in the economy?

Accepted Answer

A) $3 trillion 
B) $4 trillion 
C) $5 trillion 
D) $8 trillion 
A) $3 trillion 
B) $4 trillion 
C) $5 trillion 
D) $8 trillion

Question 8

During the recession phase of the business cycle

Accepted Answer

A) production is usually rising. 
B) interest rates are usually falling. 
C) unemployment is usually falling. 
D) income is usually rising. 
A) production is usually rising. 
B) interest rates are usually falling. 
C) unemployment is usually falling. 
D) income is usually rising.

Question 9

If,in a closed economy,real GDP is $30 billion,consumption is $20 billion,and government purchases are $5 billion,what is total saving in the economy?

Accepted Answer

A) $5 billion 
B) $15 billion 
C) $45 billion 
D) $55 billion 
A) $5 billion 
B) $15 billion 
C) $45 billion 
D) $55 billion

Question 10

Scenario 14-1
Consider the following data for a closed economy:
Y = $12 trillion
C = $8 trillion
I= $2 trillion
G = $2 trillion
TR = $2 trillion
T = $3 trillion
-Refer to Scenario 14-1.Based on the information above,what is the level of public saving?

Accepted Answer

A) $0 
B) $1 trillion 
C) $2 trillion 
D) negative $1 trillion (a deficit of $1 trillion) 
A) $0 
B) $1 trillion 
C) $2 trillion 
D) negative $1 trillion (a deficit of $1 trillion)

Question 11

Centrally-planned economies tend to grow more quickly than market economies.

Accepted Answer

A) True 
 B)False

Question 12

Figure 14-6
  
-Refer to Figure 14-6.The loanable funds market is in equilibrium,as shown in the figure above.As a result of an increase in the government budget deficit,the ________ for loanable funds will ________,thereby ________ the equilibrium real interest rate and ________ the equilibrium quantity of loanable funds.

Accepted Answer

A) demand; rise; increasing; decreasing 
B) supply; rise; decreasing; increasing 
C) demand; fall; decreasing; decreasing 
D) supply; fall; increasing; decreasing 
A) demand; rise; increasing; decreasing 
B) supply; rise; decreasing; increasing 
C) demand; fall; decreasing; decreasing 
D) supply; fall; increasing; decreasing

Question 13

India's rapid growth can be explained by

Accepted Answer

A) reduced regulations and market-based reforms.. 
B) investment in human capital from 1947 through 2013. 
C) the movement of workers from the agricultural sector to the manufacturing sector. 
D) an increase in labor force participation. 
A) reduced regulations and market-based reforms.. 
B) investment in human capital from 1947 through 2013. 
C) the movement of workers from the agricultural sector to the manufacturing sector. 
D) an increase in labor force participation.

Question 14

If consumers decide to be more frugal and save more out of their income,then this will cause

Accepted Answer

A) a shift in the supply curve for loanable funds to the right. 
B) a shift in the supply curve for loanable funds to the left. 
C) a movement to the right along the supply curve for loanable funds. 
D) a movement to the left along the supply curve for loanable funds. 
A) a shift in the supply curve for loanable funds to the right. 
B) a shift in the supply curve for loanable funds to the left. 
C) a movement to the right along the supply curve for loanable funds. 
D) a movement to the left along the supply curve for loanable funds.

Question 15

Labor productivity is

Accepted Answer

A) the quantity of output produced in one hour by several workers. 
B) the quantity of capital one worker can produce in one day. 
C) the quantity of output produced by one worker or by one hour of work. 
D) the quantity of output produced in one hour by one machine. 
A) the quantity of output produced in one hour by several workers. 
B) the quantity of capital one worker can produce in one day. 
C) the quantity of output produced by one worker or by one hour of work. 
D) the quantity of output produced in one hour by one machine.

Question 16

Which of the following would occur if the United States switched from income taxes to consumption taxes?

Accepted Answer

A) Consumption would increase. 
B) The supply of loanable funds would decrease. 
C) Saving would increase. 
D) Tax revenues would rise. 
A) Consumption would increase. 
B) The supply of loanable funds would decrease. 
C) Saving would increase. 
D) Tax revenues would rise.

Question 17

Outline the various actions the government sector could take to promote growth.

Accepted Answer

The government should secure private pro

Question 18

During a recession,spending on ________ tends to fall more dramatically than spending on ________.

Accepted Answer

A) necessities; luxuries 
B) durable goods; nondurable goods 
C) nondurable goods; durable goods 
D) food; cars 
A) necessities; luxuries 
B) durable goods; nondurable goods 
C) nondurable goods; durable goods 
D) food; cars

Question 19

In the United States,the average length of expansions from 1950 to 2009 was more than twice as long than they were from 1900 to 1950.

Accepted Answer

A) True 
 B)False

Question 20

Figure 14-6
  
-Refer to Figure 14-6.The market is in equilibrium.If the government budget deficit rises,which of the following would you expect to see?

Accepted Answer

A) The quantity of loanable funds demanded by firms will rise above $120 million. 
B) The quantity of loanable funds demanded by firms will fall below $120 million. 
C) The budget deficit will have no impact on the quantity of loanable funds demanded by firms. 
D) The interest rate will fall below 4 percent. 
A) The quantity of loanable funds demanded by firms will rise above $120 million. 
B) The quantity of loanable funds demanded by firms will fall below $120 million. 
C) The budget deficit will have no impact on the quantity of loanable funds demanded by firms. 
D) The interest rate will fall below 4 percent.

If Ebenezer Scrooge spends rather than saves his vast wealth he will

Figure 14-6 -Refer to Figure 14-6.The loanable funds market is in equilibrium,as shown in the figure above.An increase in the supply of loanable funds could result in which of the following combinations of the real interest rate and quantity of loanable funds at a new equilibrium?

Figure 14-3 -Refer to Figure 14-3.Which of the following is consistent with the graph depicted above?

The federal budget deficit can be reduced by

There is public dissaving if

How will an increase in the government budget surplus as a result of lower government spending (with no change in net taxes)affect private saving in the economy?

Scenario 14-1 Consider the following data for a closed economy: Y = $12 trillion C = $8 trillion I= $2 trillion G = $2 trillion TR = $2 trillion T = $3 trillion -Refer to Scenario 14-1.Based on the information above,what is the level of private saving in the economy?

During the recession phase of the business cycle

If,in a closed economy,real GDP is $30 billion,consumption is $20 billion,and government purchases are $5 billion,what is total saving in the economy?

Scenario 14-1 Consider the following data for a closed economy: Y = $12 trillion C = $8 trillion I= $2 trillion G = $2 trillion TR = $2 trillion T = $3 trillion -Refer to Scenario 14-1.Based on the information above,what is the level of public saving?

Centrally-planned economies tend to grow more quickly than market economies.

Figure 14-6 -Refer to Figure 14-6.The loanable funds market is in equilibrium,as shown in the figure above.As a result of an increase in the government budget deficit,the for loanable funds will ,thereby the equilibrium real interest rate and the equilibrium quantity of loanable funds.

India's rapid growth can be explained by

If consumers decide to be more frugal and save more out of their income,then this will cause

Labor productivity is

Which of the following would occur if the United States switched from income taxes to consumption taxes?

Outline the various actions the government sector could take to promote growth.

During a recession,spending on tends to fall more dramatically than spending on .

In the United States,the average length of expansions from 1950 to 2009 was more than twice as long than they were from 1900 to 1950.

Figure 14-6 -Refer to Figure 14-6.The market is in equilibrium.If the government budget deficit rises,which of the following would you expect to see?

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

If Ebenezer Scrooge spends rather than saves his vast wealth he will

Figure 14-6 -Refer to Figure 14-6.The loanable funds market is in equilibrium,as shown in the figure above.An increase in the supply of loanable funds could result in which of the following combinations of the real interest rate and quantity of loanable funds at a new equilibrium?

Figure 14-3 -Refer to Figure 14-3.Which of the following is consistent with the graph depicted above?

The federal budget deficit can be reduced by

There is public dissaving if

How will an increase in the government budget surplus as a result of lower government spending (with no change in net taxes)affect private saving in the economy?

Scenario 14-1 Consider the following data for a closed economy: Y = $12 trillion C = $8 trillion I= $2 trillion G = $2 trillion TR = $2 trillion T = $3 trillion -Refer to Scenario 14-1.Based on the information above,what is the level of private saving in the economy?

During the recession phase of the business cycle

If,in a closed economy,real GDP is $30 billion,consumption is $20 billion,and government purchases are $5 billion,what is total saving in the economy?

Scenario 14-1 Consider the following data for a closed economy: Y = $12 trillion C = $8 trillion I= $2 trillion G = $2 trillion TR = $2 trillion T = $3 trillion -Refer to Scenario 14-1.Based on the information above,what is the level of public saving?

Centrally-planned economies tend to grow more quickly than market economies.

India's rapid growth can be explained by

If consumers decide to be more frugal and save more out of their income,then this will cause

Labor productivity is

Which of the following would occur if the United States switched from income taxes to consumption taxes?

Outline the various actions the government sector could take to promote growth.

During a recession,spending on ________ tends to fall more dramatically than spending on ________.

In the United States,the average length of expansions from 1950 to 2009 was more than twice as long than they were from 1900 to 1950.

Figure 14-6 -Refer to Figure 14-6.The market is in equilibrium.If the government budget deficit rises,which of the following would you expect to see?

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

During a recession,spending on tends to fall more dramatically than spending on .