Question 1

When production in an economy grows more quickly than the population in that economy,which of the following must be occurring?

Accepted Answer

A) Real GDP is falling. 
B) Incomes are growing at a slower rate than the population. 
C) Real GDP per capita is rising. 
D) Living standards are falling. 
A) Real GDP is falling. 
B) Incomes are growing at a slower rate than the population. 
C) Real GDP per capita is rising. 
D) Living standards are falling.

Question 2

How are unemployment,inflation,and the business cycle related?

Accepted Answer

A recessionary phase of a business cycle

Question 3

Potential GDP is the maximum output a firm is capable of producing.

Accepted Answer

A) True 
 B)False

Question 4

If,as economist Alwyn Young has suggested,high growth rates in Singapore are not a result of technological progress,how are growth rates in Singapore expected to change over time?

Accepted Answer

A) Without technological progress, the high growth rates cannot be sustained. 
B) As long as the labor force participation rate is rising, growth can still continue, despite a lack of technological progress. 
C) As long as the amount of capital per hour worked continues to expand, the growth rate in Singapore will continue to rise at an increasing rate. 
D) Agricultural workers will continue to expand their productivity, thereby allowing Singapore to achieve growth rates above those of higher-income countries. 
A) Without technological progress, the high growth rates cannot be sustained. 
B) As long as the labor force participation rate is rising, growth can still continue, despite a lack of technological progress. 
C) As long as the amount of capital per hour worked continues to expand, the growth rate in Singapore will continue to rise at an increasing rate. 
D) Agricultural workers will continue to expand their productivity, thereby allowing Singapore to achieve growth rates above those of higher-income countries.

Question 5

An increase in public saving has what impact on the market for loanable funds?

Accepted Answer

A) The supply of loanable funds increases. 
B) The demand for loanable funds increases. 
C) The supply of loanable funds decreases. 
D) The demand for loanable funds decreases. 
A) The supply of loanable funds increases. 
B) The demand for loanable funds increases. 
C) The supply of loanable funds decreases. 
D) The demand for loanable funds decreases.

Question 6

As the economy nears the end of an expansion,which of the following do we typically see?

Accepted Answer

A) rising firm profits 
B) rising levels of firm investment 
C) rising interest rates 
D) falling wages relative to output prices 
A) rising firm profits 
B) rising levels of firm investment 
C) rising interest rates 
D) falling wages relative to output prices

Question 7

Between 1950 and 2009,the average length of recessions in the United States was

Accepted Answer

A) 11 months. 
B) two years. 
C) three months. 
D) eighteen months. 
A) 11 months. 
B) two years. 
C) three months. 
D) eighteen months.

Question 8

According to the "Rule of 70," how many years will it take for real GDP per capita to double when the growth rate of real GDP per capita is 5%?

Accepted Answer

A) less than 1 year 
B) 5 years 
C) 14 years 
D) 35 years 
A) less than 1 year 
B) 5 years 
C) 14 years 
D) 35 years

Question 9

Economist Robert Fogel has estimated that by the year 2040,individuals in the United States will be spending

Accepted Answer

A) more time in the workforce and more time in leisure activities than they do today. 
B) less time in the workforce and less time in leisure activities than they do today. 
C) less time in the workforce and more time in leisure activities than they do today. 
D) more time in the workforce and less time in leisure activities than they do today. 
A) more time in the workforce and more time in leisure activities than they do today. 
B) less time in the workforce and less time in leisure activities than they do today. 
C) less time in the workforce and more time in leisure activities than they do today. 
D) more time in the workforce and less time in leisure activities than they do today.

Question 10

In a closed economy,which of the following equations reflects investment? (Y = GDP,C = Consumption,G = Government purchases,T = Taxes,and TR = Transfers)

Accepted Answer

A) Y - C - G 
B) Y - C - T 
C) Y - T + TR 
D) C + G -T 
A) Y - C - G 
B) Y - C - T 
C) Y - T + TR 
D) C + G -T

Question 11

The best measure of the standard of living is

Accepted Answer

A) nominal GDP. 
B) real GDP. 
C) nominal GDP per capita. 
D) real GDP per capita. 
A) nominal GDP. 
B) real GDP. 
C) nominal GDP per capita. 
D) real GDP per capita.

Question 12

When the government runs a budget deficit,we would expect to see that

Accepted Answer

A) private saving will fall. 
B) investment will fall. 
C) G + TR < T. 
D) public saving is positive. 
A) private saving will fall. 
B) investment will fall. 
C) G + TR < T. 
D) public saving is positive.

Question 13

Explain what happens to inflation during the business cycle.Give an intuitive explanation as to why inflation changes the way it does over the business cycle.

Accepted Answer

Inflation will rise during an expansion

Question 14

Financial markets and financial intermediaries comprise the financial system.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following will not occur as the result of a decrease in net taxes?

Accepted Answer

A) decreased household saving 
B) decreased government saving 
C) a shift to the left of the supply curve for loanable funds 
D) all of the above 
A) decreased household saving 
B) decreased government saving 
C) a shift to the left of the supply curve for loanable funds 
D) all of the above

Question 16

If real GDP in a small country in 2012 is $8 billion and real GDP in the same country in 2013 is $8.3 billion,the growth rate of real GDP between 2012 and 2013

Accepted Answer

A) is 3.0%. 
B) is 3.6%. 
C) is 3.75%. 
D) cannot be determined from the information given. 
A) is 3.0%. 
B) is 3.6%. 
C) is 3.75%. 
D) cannot be determined from the information given.

Question 17

The effect of a recession on a company like Whirlpool Corporation is such that

Accepted Answer

A) sales decline more sharply for Whirlpool as compared to firms that do not produce durable goods. 
B) profits fall less sharply as compared to firms that do not produce durable goods. 
C) the decline in sales is more short-lived as compared to firms that do not produce durable goods. 
D) there is no difference in the impact of the recession on its profits as compared to firms that do not produce durable goods. 
A) sales decline more sharply for Whirlpool as compared to firms that do not produce durable goods. 
B) profits fall less sharply as compared to firms that do not produce durable goods. 
C) the decline in sales is more short-lived as compared to firms that do not produce durable goods. 
D) there is no difference in the impact of the recession on its profits as compared to firms that do not produce durable goods.

Question 18

When the economy enters a recessionary phase of the business cycle,unemployment tends to

Accepted Answer

A) decrease. 
B) increase. 
C) be unchanged. 
D) change in the same direction as the rate of inflation. 
A) decrease. 
B) increase. 
C) be unchanged. 
D) change in the same direction as the rate of inflation.

Question 19

Explain why increasing the government budget deficit can decrease investment spending.

Accepted Answer

Saving must equal investment in the econ

Question 20

The rule of 70 states that

Accepted Answer

A) it takes an economy 70 years to double its real GDP. 
B) the number of years it takes an economy to double in size is 70 divided by the growth rate. 
C) the number of years it takes an economy to double in size is the growth rate times 70. 
D) the number of years it takes an economy to double in size is the growth rate divided by 70. 
A) it takes an economy 70 years to double its real GDP. 
B) the number of years it takes an economy to double in size is 70 divided by the growth rate. 
C) the number of years it takes an economy to double in size is the growth rate times 70. 
D) the number of years it takes an economy to double in size is the growth rate divided by 70.

When production in an economy grows more quickly than the population in that economy,which of the following must be occurring?

How are unemployment,inflation,and the business cycle related?

Potential GDP is the maximum output a firm is capable of producing.

If,as economist Alwyn Young has suggested,high growth rates in Singapore are not a result of technological progress,how are growth rates in Singapore expected to change over time?

An increase in public saving has what impact on the market for loanable funds?

As the economy nears the end of an expansion,which of the following do we typically see?

Between 1950 and 2009,the average length of recessions in the United States was

According to the "Rule of 70," how many years will it take for real GDP per capita to double when the growth rate of real GDP per capita is 5%?

Economist Robert Fogel has estimated that by the year 2040,individuals in the United States will be spending

In a closed economy,which of the following equations reflects investment? (Y = GDP,C = Consumption,G = Government purchases,T = Taxes,and TR = Transfers)

The best measure of the standard of living is

When the government runs a budget deficit,we would expect to see that

Explain what happens to inflation during the business cycle.Give an intuitive explanation as to why inflation changes the way it does over the business cycle.

Financial markets and financial intermediaries comprise the financial system.

Which of the following will not occur as the result of a decrease in net taxes?

If real GDP in a small country in 2012 is $8 billion and real GDP in the same country in 2013 is $8.3 billion,the growth rate of real GDP between 2012 and 2013

The effect of a recession on a company like Whirlpool Corporation is such that

When the economy enters a recessionary phase of the business cycle,unemployment tends to

Explain why increasing the government budget deficit can decrease investment spending.

The rule of 70 states that

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

When production in an economy grows more quickly than the population in that economy,which of the following must be occurring?

How are unemployment,inflation,and the business cycle related?

Potential GDP is the maximum output a firm is capable of producing.

If,as economist Alwyn Young has suggested,high growth rates in Singapore are not a result of technological progress,how are growth rates in Singapore expected to change over time?

An increase in public saving has what impact on the market for loanable funds?

As the economy nears the end of an expansion,which of the following do we typically see?

Between 1950 and 2009,the average length of recessions in the United States was

According to the "Rule of 70," how many years will it take for real GDP per capita to double when the growth rate of real GDP per capita is 5%?

Economist Robert Fogel has estimated that by the year 2040,individuals in the United States will be spending

In a closed economy,which of the following equations reflects investment? (Y = GDP,C = Consumption,G = Government purchases,T = Taxes,and TR = Transfers)

The best measure of the standard of living is

When the government runs a budget deficit,we would expect to see that

Explain what happens to inflation during the business cycle.Give an intuitive explanation as to why inflation changes the way it does over the business cycle.

Financial markets and financial intermediaries comprise the financial system.

Which of the following will not occur as the result of a decrease in net taxes?

If real GDP in a small country in 2012 is $8 billion and real GDP in the same country in 2013 is $8.3 billion,the growth rate of real GDP between 2012 and 2013

The effect of a recession on a company like Whirlpool Corporation is such that

When the economy enters a recessionary phase of the business cycle,unemployment tends to

Explain why increasing the government budget deficit can decrease investment spending.

The rule of 70 states that

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