Question 1

Long-run economic growth:

Accepted Answer

A) is due to increases in capital productivity rather than labour productivity. 
B) does not usually occur due to the economic recessions that occur as part of the business cycle. 
C) depends more on increases in capital per hour worked than on technological change. 
D) depends more on technological change than on increases in capital per hour worked. 
A) is due to increases in capital productivity rather than labour productivity. 
B) does not usually occur due to the economic recessions that occur as part of the business cycle. 
C) depends more on increases in capital per hour worked than on technological change. 
D) depends more on technological change than on increases in capital per hour worked.

Question 2

The 'rule of 70' states that:

Accepted Answer

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

Question 3

A government budget surplus will shift the ________ curve for loanable funds to the ________ and the equilibrium real interest rate will ________.

Accepted Answer

A) supply; right; fall 
B) supply; left; rise 
C) demand; right; rise 
D) demand; left; fall 
A) supply; right; fall 
B) supply; left; rise 
C) demand; right; rise 
D) demand; left; fall

Question 4

Assume that the government reduces taxation on earnings from dividends on shares. Use the model of the loanable funds market to describe what will happen to the savings, investment, economic growth, the real interest rate and the quantity of loanable funds exchanged.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

Dividends are the share of company profi

Question 5

Let G = government purchases; T = taxes; TR = transfer payments. The budget surplus is defined as:

Accepted Answer

A) T - (G + TR)> 0. 
B) T - (G + TR) 0. 
D) T + (G + TR)> 0. 
A) T - (G + TR)> 0. 
B) T - (G + TR) 0. 
D) T + (G + TR)> 0.

Question 6

Which of the following experiences in the Australian economy led to an increase in the unemployment rate and the inflation rate?

Accepted Answer

A) The world oil shock of 1974. 
B) The policy of high interest rates in the late 1980s. 
C) The introduction of the Goods and Services Tax (GST)in 2000. 
D) The introduction of unemployment benefit payments in 1944. 
A) The world oil shock of 1974. 
B) The policy of high interest rates in the late 1980s. 
C) The introduction of the Goods and Services Tax (GST)in 2000. 
D) The introduction of unemployment benefit payments in 1944.

Question 7

Economic growth depends more on technological change than on increases in capital per hour worked.

Accepted Answer

A) True 
 B)False

Question 8

Suppose that real GDP for 2017 was $10 000 billion and real GDP for 2018 was $11 000 billion. What is the rate of growth of real GDP?

Accepted Answer

A) 11% 
B) 10% 
C) 5% 
D) 2% 
A) 11% 
B) 10% 
C) 5% 
D) 2%

Question 9

Using equations, show that saving must be equal to investment in the closed economy. Begin with the expression of total saving in the economy.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

S = S_private + S_public. (1) Private saving is: S_private = Y

Question 10

Economist Steve Landsburg has pointed out that Ebenezer Scrooge's change in behaviour 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 11

Which one of the following is not considered a financial intermediary?

Accepted Answer

A) a building society 
B) a managed fund 
C) an insurance company 
D) a financial advisor 
A) a building society 
B) a managed fund 
C) an insurance company 
D) a financial advisor

Question 12

Which of the following would not increase potential GDP?

Accepted Answer

A) an increase in the size of the labour force 
B) technological change 
C) a fall in the rate of unemployment 
D) new factories being built 
A) an increase in the size of the labour force 
B) technological change 
C) a fall in the rate of unemployment 
D) new factories being built

Question 13

Which of the following is not one of the key services provided by the financial system?

Accepted Answer

A) decreasing taxes 
B) risk sharing 
C) liquidity 
D) information 
A) decreasing taxes 
B) risk sharing 
C) liquidity 
D) information

Question 14

If GDP is currently $13 trillion and is growing at a rate of 2.6% per year, how long will it take GDP to reach $26 trillion?

Accepted Answer

A) about 15 years 
B) about 17 years 
C) about 27 years 
D) about 30 years 
A) about 15 years 
B) about 17 years 
C) about 27 years 
D) about 30 years

Question 15

Which of the following is not a reason why the Australian economy has generally been more stable since 1950 than before that time?

Accepted Answer

A) Goods have become a larger fraction of GDP and services have become a smaller fraction of GDP. 
B) The government has actively pursued economic policy to combat recessions and prolong expansions. 
C) Unemployment benefits and other government programs curtail the decline in spending that occurs during a recession. 
D) Services have become a larger fraction of GDP and goods have become a smaller fraction of GDP. 
A) Goods have become a larger fraction of GDP and services have become a smaller fraction of GDP. 
B) The government has actively pursued economic policy to combat recessions and prolong expansions. 
C) Unemployment benefits and other government programs curtail the decline in spending that occurs during a recession. 
D) Services have become a larger fraction of GDP and goods have become a smaller fraction of GDP.

Question 16

Carefully define the two categories of 'saving' in the economy.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

There are two categories of saving in th

Question 17

If taxes are more than transfer payments plus government spending, then there:

Accepted Answer

A) are positive savings. 
B) is a balanced budget. 
C) is a budget surplus. 
D) is dissaving. 
A) are positive savings. 
B) is a balanced budget. 
C) is a budget surplus. 
D) is dissaving.

Question 18

A government budget deficit will shift the ________ curve for loanable funds to the ________ and the equilibrium real interest rate will ________.

Accepted Answer

A) supply; right; fall 
B) supply; left; rise 
C) demand; right; rise 
D) demand; left; fall 
A) supply; right; fall 
B) supply; left; rise 
C) demand; right; rise 
D) demand; left; fall

Question 19

The lengths of the recession and expansion phases and which sectors of the economy are most affected will rarely be the same in any two business cycles.

Accepted Answer

A) True 
 B)False

Question 20

Outline the phases of the business cycle, and explain why business cycles have generally become less severe in Australia since the 1950s.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The phases are: the expansion phase, the

Long-run economic growth:

The 'rule of 70' states that:

A government budget surplus will shift the curve for loanable funds to the and the equilibrium real interest rate will .

Assume that the government reduces taxation on earnings from dividends on shares. Use the model of the loanable funds market to describe what will happen to the savings, investment, economic growth, the real interest rate and the quantity of loanable funds exchanged. _ _

Let G = government purchases; T = taxes; TR = transfer payments. The budget surplus is defined as:

Which of the following experiences in the Australian economy led to an increase in the unemployment rate and the inflation rate?

Economic growth depends more on technological change than on increases in capital per hour worked.

Suppose that real GDP for 2017 was $10 000 billion and real GDP for 2018 was $11 000 billion. What is the rate of growth of real GDP?

Using equations, show that saving must be equal to investment in the closed economy. Begin with the expression of total saving in the economy. _ _

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

Which one of the following is not considered a financial intermediary?

Which of the following would not increase potential GDP?

Which of the following is not one of the key services provided by the financial system?

If GDP is currently $13 trillion and is growing at a rate of 2.6% per year, how long will it take GDP to reach $26 trillion?

Which of the following is not a reason why the Australian economy has generally been more stable since 1950 than before that time?

Carefully define the two categories of 'saving' in the economy. _ _

If taxes are more than transfer payments plus government spending, then there:

A government budget deficit will shift the curve for loanable funds to the and the equilibrium real interest rate will .

The lengths of the recession and expansion phases and which sectors of the economy are most affected will rarely be the same in any two business cycles.

Outline the phases of the business cycle, and explain why business cycles have generally become less severe in Australia since the 1950s. _ _

Economics: Foundations and Models

Choices and Trade Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Gdp: Measuring Total Production, Income and Economic Growth

Long-Run Economic Growth: Sources and Policies

Unemployment

Inflation

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks and the Reserve Bank of Australia

Monetary Policy

Fiscal Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 5: Economic Growth, the Financial System and Business Cycles

Long-run economic growth:

The 'rule of 70' states that:

A government budget surplus will shift the ________ curve for loanable funds to the ________ and the equilibrium real interest rate will ________.

Let G = government purchases; T = taxes; TR = transfer payments. The budget surplus is defined as:

Which of the following experiences in the Australian economy led to an increase in the unemployment rate and the inflation rate?

Economic growth depends more on technological change than on increases in capital per hour worked.

Suppose that real GDP for 2017 was $10 000 billion and real GDP for 2018 was $11 000 billion. What is the rate of growth of real GDP?

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

Which one of the following is not considered a financial intermediary?

Which of the following would not increase potential GDP?

Which of the following is not one of the key services provided by the financial system?

If GDP is currently $13 trillion and is growing at a rate of 2.6% per year, how long will it take GDP to reach $26 trillion?

Which of the following is not a reason why the Australian economy has generally been more stable since 1950 than before that time?

Carefully define the two categories of 'saving' in the economy. _____________________________________________________________________________________________ _____________________________________________________________________________________________

If taxes are more than transfer payments plus government spending, then there:

A government budget deficit will shift the ________ curve for loanable funds to the ________ and the equilibrium real interest rate will ________.

The lengths of the recession and expansion phases and which sectors of the economy are most affected will rarely be the same in any two business cycles.

Economics: Foundations and Models

Choices and Trade Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Gdp: Measuring Total Production, Income and Economic Growth

Long-Run Economic Growth: Sources and Policies

Unemployment

Inflation

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks and the Reserve Bank of Australia

Monetary Policy

Fiscal Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

A government budget surplus will shift the curve for loanable funds to the and the equilibrium real interest rate will .

Carefully define the two categories of 'saving' in the economy. _ _

A government budget deficit will shift the curve for loanable funds to the and the equilibrium real interest rate will .