Question 1

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

Question 2

Inflation tends to ________ during the expansion phase of the business cycle and ________ during the recession phase of the business cycle.

Accepted Answer

A)  increase; decrease 
B)  decrease; increase 
C)  decrease; decrease further 
D)  increase; increase further 
A)  increase; decrease 
B)  decrease; increase 
C)  decrease; decrease further 
D)  increase; increase further

Question 3

SCENARIO21-1
  
-Refer to Scenario 21-1.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 4

Potential GDP refers to

Accepted Answer

A)  the level of GDP attained when all firms are producing at capacity. 
B)  the level of GDP attained by the country with the highest growth in real GDP in a given year. 
C)  the difference between the highest level of real GDP per quarter and the lowest level of real GDP per quarter within any given year. 
D)  the extent to which real GDP is above or below nominal GDP. 
A)  the level of GDP attained when all firms are producing at capacity. 
B)  the level of GDP attained by the country with the highest growth in real GDP in a given year. 
C)  the difference between the highest level of real GDP per quarter and the lowest level of real GDP per quarter within any given year. 
D)  the extent to which real GDP is above or below nominal GDP.

Question 5

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 6

If real GDP per capita doubles between 2005 and 2020,what is the average annual growth rate of real GDP per capita?

Accepted Answer

A)  4.7% 
B)  10.5% 
C)  15% 
D)  21% 
A)  4.7% 
B)  10.5% 
C)  15% 
D)  21%

Question 7

How would the equilibrium quantity of loanable funds respond to a change from an income tax to a consumption tax?

Accepted Answer

A)  The equilibrium quantity of loanable funds would rise. 
B)  The equilibrium quantity of loanable funds would fall. 
C)  The equilibrium quantity of loanable funds would be unaffected. 
D)  The equilibrium quantity of loanable funds may rise or fall based on whether household saving increases or decreases as a result of the change from an income tax to a consumption tax. 
A)  The equilibrium quantity of loanable funds would rise. 
B)  The equilibrium quantity of loanable funds would fall. 
C)  The equilibrium quantity of loanable funds would be unaffected. 
D)  The equilibrium quantity of loanable funds may rise or fall based on whether household saving increases or decreases as a result of the change from an income tax to a consumption tax.

Question 8

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 9

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 10

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

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

Inflation tends to during the expansion phase of the business cycle and during the recession phase of the business cycle.

SCENARIO21-1 -Refer to Scenario 21-1.Based on the information above,what is the level of public saving?

Potential GDP refers to

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

If real GDP per capita doubles between 2005 and 2020,what is the average annual growth rate of real GDP per capita?

How would the equilibrium quantity of loanable funds respond to a change from an income tax to a consumption tax?

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?

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

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%?

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

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

Inflation tends to ________ during the expansion phase of the business cycle and ________ during the recession phase of the business cycle.

SCENARIO21-1 -Refer to Scenario 21-1.Based on the information above,what is the level of public saving?

Potential GDP refers to

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

If real GDP per capita doubles between 2005 and 2020,what is the average annual growth rate of real GDP per capita?

How would the equilibrium quantity of loanable funds respond to a change from an income tax to a consumption tax?

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?

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

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%?

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

Inflation tends to during the expansion phase of the business cycle and during the recession phase of the business cycle.