Question 1

In a closed economy,

Accepted Answer

A)  I = Y - C - G. 
B)  I = Y + C - G. 
C)  I = Y - C + G. 
D)  I = Y + C + G. 
A)  I = Y - C - G. 
B)  I = Y + C - G. 
C)  I = Y - C + G. 
D)  I = Y + C + G.

Question 2

According to Robert Fogel,economic growth ________ health,and health ________ economic growth.

Accepted Answer

A)  improves; worsens 
B)  improves; improves 
C)  worsens; improves 
D)  worsens; worsens 
A)  improves; worsens 
B)  improves; improves 
C)  worsens; improves 
D)  worsens; worsens

Question 3

Financial markets and financial intermediaries comprise the financial system.

Accepted Answer

A) True 
 B)False

Question 4

If technological change increases the profitability of new investment for firms,then the ________ curve for loanable funds will shift 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 5

What type of consumer goods are most affected by the business cycle: durable goods or nondurable goods? Why?

Accepted Answer

Some workers lose income during a recess

Question 6

If real GDP in a closed economy is $40 billion,consumption is $20 billion,and government purchases are $10 billion,what is investment?

Accepted Answer

A)  $10 billion 
B)  $30 billion 
C)  $40 billion 
D)  $70 billion 
A)  $10 billion 
B)  $30 billion 
C)  $40 billion 
D)  $70 billion

Question 7

Explain why the demand curve for loanable funds has a negative slope.

Accepted Answer

The demand for loanable funds reflects t

Question 8

Which of the following is not a reason why the U.S.economy has been more stable since 1950?

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 policy to combat recessions and prolong expansions. 
C)  Unemployment insurance 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 policy to combat recessions and prolong expansions. 
C)  Unemployment insurance 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 9

The supply of loanable funds has a ________ slope because the greater the interest rate,the ________ the reward to saving,and the ________ the quantity of loanable funds supplied.

Accepted Answer

A)  positive; lesser; lesser 
B)  positive; greater; lesser 
C)  negative; lesser; greater 
D)  positive; greater; greater 
A)  positive; lesser; lesser 
B)  positive; greater; lesser 
C)  negative; lesser; greater 
D)  positive; greater; greater

Question 10

An increase in the 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 11

The sum of public and private saving in an economy is equal to

Accepted Answer

A)  Y - C - T. 
B)  T - TR - G. 
C)  Y - C - G. 
D)  I - C - G. 
A)  Y - C - T. 
B)  T - TR - G. 
C)  Y - C - G. 
D)  I - C - G.

Question 12

For the recessions in the United States since the 1950s,

Accepted Answer

A)  inflation has been nonexistent. 
B)  the inflation rate rises on average by about 2.5 percentage points 12 months after a recession begins. 
C)  the inflation rate falls on average by about 2.5 percentage points 12 months after a recession begins. 
D)  deflation occurs. 
A)  inflation has been nonexistent. 
B)  the inflation rate rises on average by about 2.5 percentage points 12 months after a recession begins. 
C)  the inflation rate falls on average by about 2.5 percentage points 12 months after a recession begins. 
D)  deflation occurs.

Question 13

When the economy reaches a trough in a business cycle,which of the following will occur?

Accepted Answer

A)  Income, production, and employment will continue to fall. 
B)  Income, production, and employment will begin to rise. 
C)  Income and production will rise, but employment will continue to fall. 
D)  Employment rises, but income and production will continue to fall. 
A)  Income, production, and employment will continue to fall. 
B)  Income, production, and employment will begin to rise. 
C)  Income and production will rise, but employment will continue to fall. 
D)  Employment rises, but income and production will continue to fall.

Question 14

________ are financial securities that represent promises to repay a fixed amount of funds.

Accepted Answer

A)  Stocks 
B)  Bonds 
C)  Interest rates 
D)  Mutual funds 
A)  Stocks 
B)  Bonds 
C)  Interest rates 
D)  Mutual funds

Question 15

Which of the following indicates that the U.S.economy has become more stable since 1950?

Accepted Answer

A)  longer recessions 
B)  shorter expansions 
C)  less severe fluctuations in real GDP 
D)  All of the above indicate that the U.S. economy has become more stable since 1950. 
A)  longer recessions 
B)  shorter expansions 
C)  less severe fluctuations in real GDP 
D)  All of the above indicate that the U.S. economy has become more stable since 1950.

Question 16

Potential GDP in the United States

Accepted Answer

A)  does not change over time. 
B)  grows as the economy grows. 
C)  changes over a given business cycle. 
D)  declines over time. 
A)  does not change over time. 
B)  grows as the economy grows. 
C)  changes over a given business cycle. 
D)  declines over time.

Question 17

If taxes are less than transfers plus government spending,then

Accepted Answer

A)  there is positive saving. 
B)  there is a balanced budget. 
C)  there is a budget surplus. 
D)  there is public dissaving. 
A)  there is positive saving. 
B)  there is a balanced budget. 
C)  there is a budget surplus. 
D)  there is public dissaving.

Question 18

Inflation usually increases during a recession and decreases during an expansion.

Accepted Answer

A) True 
 B)False

Question 19

Suppose that real GDP for 2010 was $10,000 billion and real GDP for 2011 was $11,000 billion.What is the rate of growth of real GDP between 2010 and 2011?

Accepted Answer

A)  1% 
B)  2% 
C)  5% 
D)  10% 
A)  1% 
B)  2% 
C)  5% 
D)  10%

Question 20

The Business Cycle Dating Committee,a part of the ________,officially decides when a recession begins and ends.

Accepted Answer

A)  federal government 
B)  Bureau of Labor Statistics 
C)  National Bureau of Economic Research 
D)  Federal Reserve 
A)  federal government 
B)  Bureau of Labor Statistics 
C)  National Bureau of Economic Research 
D)  Federal Reserve

In a closed economy,

According to Robert Fogel,economic growth health,and health economic growth.

Financial markets and financial intermediaries comprise the financial system.

If technological change increases the profitability of new investment for firms,then the curve for loanable funds will shift to the and the equilibrium real interest rate will .

What type of consumer goods are most affected by the business cycle: durable goods or nondurable goods? Why?

If real GDP in a closed economy is $40 billion,consumption is $20 billion,and government purchases are $10 billion,what is investment?

Explain why the demand curve for loanable funds has a negative slope.

Which of the following is not a reason why the U.S.economy has been more stable since 1950?

The supply of loanable funds has a slope because the greater the interest rate,the the reward to saving,and the the quantity of loanable funds supplied.

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

The sum of public and private saving in an economy is equal to

For the recessions in the United States since the 1950s,

When the economy reaches a trough in a business cycle,which of the following will occur?

________ are financial securities that represent promises to repay a fixed amount of funds.

Which of the following indicates that the U.S.economy has become more stable since 1950?

Potential GDP in the United States

If taxes are less than transfers plus government spending,then

Inflation usually increases during a recession and decreases during an expansion.

Suppose that real GDP for 2010 was $10,000 billion and real GDP for 2011 was $11,000 billion.What is the rate of growth of real GDP between 2010 and 2011?

The Business Cycle Dating Committee,a part of the ________,officially decides when a recession begins and ends.

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

In a closed economy,

According to Robert Fogel,economic growth ________ health,and health ________ economic growth.

Financial markets and financial intermediaries comprise the financial system.

If technological change increases the profitability of new investment for firms,then the ________ curve for loanable funds will shift to the ________ and the equilibrium real interest rate will ________.

What type of consumer goods are most affected by the business cycle: durable goods or nondurable goods? Why?

If real GDP in a closed economy is $40 billion,consumption is $20 billion,and government purchases are $10 billion,what is investment?

Explain why the demand curve for loanable funds has a negative slope.

Which of the following is not a reason why the U.S.economy has been more stable since 1950?

The supply of loanable funds has a ________ slope because the greater the interest rate,the ________ the reward to saving,and the ________ the quantity of loanable funds supplied.

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

The sum of public and private saving in an economy is equal to

For the recessions in the United States since the 1950s,

When the economy reaches a trough in a business cycle,which of the following will occur?

________ are financial securities that represent promises to repay a fixed amount of funds.

Which of the following indicates that the U.S.economy has become more stable since 1950?

Potential GDP in the United States

If taxes are less than transfers plus government spending,then

Inflation usually increases during a recession and decreases during an expansion.

Suppose that real GDP for 2010 was $10,000 billion and real GDP for 2011 was $11,000 billion.What is the rate of growth of real GDP between 2010 and 2011?

The Business Cycle Dating Committee,a part of the ________,officially decides when a recession begins and ends.

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

According to Robert Fogel,economic growth health,and health economic growth.

If technological change increases the profitability of new investment for firms,then the curve for loanable funds will shift to the and the equilibrium real interest rate will .

The supply of loanable funds has a slope because the greater the interest rate,the the reward to saving,and the the quantity of loanable funds supplied.

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