Question 1

Under which of the following circumstances would private saving be positive in a closed economy?

Accepted Answer

A)  Y = $10 trillion C = $5 trillion TR = $2 trillion G = $2 trillion public saving = $1 trillion 
B)  Y = $9 trillion C = $5 trillion TR = $1 trillion G = $1 trillion public saving = $3 trillion 
C)  Y = $8 trillion C = $2 trillion TR = $4 trillion G = $2 trillion public saving = $4 trillion 
D)  Y = $6 trillion C = $2 trillion TR = $8 trillion G = $3 trillion public saving = $1 trillion 
A)  Y = $10 trillion C = $5 trillion TR = $2 trillion G = $2 trillion public saving = $1 trillion 
B)  Y = $9 trillion C = $5 trillion TR = $1 trillion G = $1 trillion public saving = $3 trillion 
C)  Y = $8 trillion C = $2 trillion TR = $4 trillion G = $2 trillion public saving = $4 trillion 
D)  Y = $6 trillion C = $2 trillion TR = $8 trillion G = $3 trillion public saving = $1 trillion

Question 2

The period between a business cycle peak and a business cycle trough is called

Accepted Answer

A)  expansion. 
B)  recession. 
C)  diffusion. 
D)  recalculation. 
A)  expansion. 
B)  recession. 
C)  diffusion. 
D)  recalculation.

Question 3

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 4

At the end of World War II in 1945,many economists and business managers expected that the U.S.economy would enter a severe recession.At that time,Sears and Montgomery Ward were the two largest department store chains in the country.Sears CEO Robert Wood expected continuing prosperity and opened new stores.Montgomery Ward CEO Sewell Avery expected falling incomes and rising unemployment and closed a number of existing stores.The results of their actions were seen during the late 1940s,when

Accepted Answer

A)  Sears declared bankruptcy and was purchased by Montgomery Ward. 
B)  Montgomery Ward weathered the economic downturn in better financial shape than Sears. 
C)  Sears rapidly gained market share at Montgomery Ward's expense. 
D)  Sears had to close many of the new stores it had opened following the end of the war. 
A)  Sears declared bankruptcy and was purchased by Montgomery Ward. 
B)  Montgomery Ward weathered the economic downturn in better financial shape than Sears. 
C)  Sears rapidly gained market share at Montgomery Ward's expense. 
D)  Sears had to close many of the new stores it had opened following the end of the war.

Question 5

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 6

Since 1900,real GDP in the United States has grown

Accepted Answer

A)  more rapidly than the population. 
B)  more slowly than the population. 
C)  as rapidly as the population. 
D)  in a random unpredictable manner relative to the population. 
A)  more rapidly than the population. 
B)  more slowly than the population. 
C)  as rapidly as the population. 
D)  in a random unpredictable manner relative to the population.

Question 7

From 1991 until 2001,the United States was in a period of

Accepted Answer

A)  expansion. 
B)  recession. 
C)  business cycle troughs. 
D)  business cycle peaks. 
A)  expansion. 
B)  recession. 
C)  business cycle troughs. 
D)  business cycle peaks.

Question 8

If real GDP grows by 3% in 2009,3.2% in 2010,and 2.5% in 2011,what is the average annual growth rate of real GDP?

Accepted Answer

A)  2.6% 
B)  2.9% 
C)  3.1% 
D)  4.2% 
A)  2.6% 
B)  2.9% 
C)  3.1% 
D)  4.2%

Question 9

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 10

Which of the following would encourage economic growth through increases in the capital stock?

Accepted Answer

A)  a change from an income tax to a consumption tax 
B)  an increase in household saving 
C)  a decrease in the government deficit 
D)  all of the above 
A)  a change from an income tax to a consumption tax 
B)  an increase in household saving 
C)  a decrease in the government deficit 
D)  all of the above

Question 11

Long-run economic growth requires all of the following except

Accepted Answer

A)  technological change. 
B)  increases in capital per hour worked. 
C)  government provision of secure property rights. 
D)  political instability. 
A)  technological change. 
B)  increases in capital per hour worked. 
C)  government provision of secure property rights. 
D)  political instability.

Question 12

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 13

In comparison to a government that runs a balanced budget,when the government runs a budget deficit,

Accepted Answer

A)  the equilibrium interest rate will fall. 
B)  business investment will fall. 
C)  household savings will fall. 
D)  none of the above 
A)  the equilibrium interest rate will fall. 
B)  business investment will fall. 
C)  household savings will fall. 
D)  none of the above

Question 14

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 15

If there is public dissaving,investment spending in the economy will decline,holding everything else constant.

Accepted Answer

A) True 
 B)False

Question 16

If real GDP in a small country in 2010 is $8 billion and real GDP in the same country in 2011 is $8.3 billion,the growth rate of real GDP between 2010 and 2011

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 NBER's Business Cycle Dating Committee defines a recession as at least two consecutive quarters of falling real GDP.

Accepted Answer

A) True 
 B)False

Question 18

A firm can fund an expansion of its operations by

Accepted Answer

A)  issuing bonds. 
B)  buying stock. 
C)  paying dividends. 
D)  loaning money. 
A)  issuing bonds. 
B)  buying stock. 
C)  paying dividends. 
D)  loaning money.

Question 19

An increase in the real interest rate will decrease consumption and investment.

Accepted Answer

A) True 
 B)False

Question 20

Economists have not found a way to predict when recessions will begin and end.

Accepted Answer

A) True 
 B)False

Under which of the following circumstances would private saving be positive in a closed economy?

The period between a business cycle peak and a business cycle trough is called

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

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

Since 1900,real GDP in the United States has grown

From 1991 until 2001,the United States was in a period of

If real GDP grows by 3% in 2009,3.2% in 2010,and 2.5% in 2011,what is the average annual growth rate of real GDP?

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

Which of the following would encourage economic growth through increases in the capital stock?

Long-run economic growth requires all of the following except

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

In comparison to a government that runs a balanced budget,when the government runs a budget deficit,

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

If there is public dissaving,investment spending in the economy will decline,holding everything else constant.

If real GDP in a small country in 2010 is $8 billion and real GDP in the same country in 2011 is $8.3 billion,the growth rate of real GDP between 2010 and 2011

The NBER's Business Cycle Dating Committee defines a recession as at least two consecutive quarters of falling real GDP.

A firm can fund an expansion of its operations by

An increase in the real interest rate will decrease consumption and investment.

Economists have not found a way to predict when recessions will begin and end.

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency,government Price Setting,and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 10: Economic Growth, the Financial System, and Business Cycles

Under which of the following circumstances would private saving be positive in a closed economy?

The period between a business cycle peak and a business cycle trough is called

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

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

Since 1900,real GDP in the United States has grown

From 1991 until 2001,the United States was in a period of

If real GDP grows by 3% in 2009,3.2% in 2010,and 2.5% in 2011,what is the average annual growth rate of real GDP?

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

Which of the following would encourage economic growth through increases in the capital stock?

Long-run economic growth requires all of the following except

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

In comparison to a government that runs a balanced budget,when the government runs a budget deficit,

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

If there is public dissaving,investment spending in the economy will decline,holding everything else constant.

If real GDP in a small country in 2010 is $8 billion and real GDP in the same country in 2011 is $8.3 billion,the growth rate of real GDP between 2010 and 2011

The NBER's Business Cycle Dating Committee defines a recession as at least two consecutive quarters of falling real GDP.

A firm can fund an expansion of its operations by

An increase in the real interest rate will decrease consumption and investment.

Economists have not found a way to predict when recessions will begin and end.

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency,government Price Setting,and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters