Question 1

Financial markets and financial intermediaries comprise the financial system.

Accepted Answer

A) True 
 B)False

Question 2

A government budget surplus from reduced government spending (no change in net taxes)will ________ the level of investment in the economy and ________ the level of total saving (private plus public)in the economy.

Accepted Answer

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

Question 3

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 4

Briefly explain how the miserliness of Ebenezer Scrooge might actually be beneficial for economic growth.

Accepted Answer

Ebenezer Scrooge is known for his unwill

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

There is a federal budget deficit when

Accepted Answer

A)  the government spends less that it collects in taxes. 
B)  the government spends more that it collects in taxes. 
C)  the government spends the same amount it collects in taxes. 
D)  taxes are too high. 
A)  the government spends less that it collects in taxes. 
B)  the government spends more that it collects in taxes. 
C)  the government spends the same amount it collects in taxes. 
D)  taxes are too high.

Question 7

The demand for loanable funds is downward sloping because the ________ the interest rate,the ________ the number of profitable investment projects a firm can undertake,and the ________ the quantity demanded of loanable funds.

Accepted Answer

A)  lower; greater; greater 
B)  lower; smaller; greater 
C)  greater; greater; greater 
D)  greater; smaller; greater 
A)  lower; greater; greater 
B)  lower; smaller; greater 
C)  greater; greater; greater 
D)  greater; smaller; greater

Question 8

Since the 1950s

Accepted Answer

A)  the United States has not experienced a business cycle. 
B)  U.S. business cycle fluctuations have becomes more volatile. 
C)  U.S. business cycle fluctuations have become milder. 
D)  U.S. business cycle fluctuations have not changed. 
A)  the United States has not experienced a business cycle. 
B)  U.S. business cycle fluctuations have becomes more volatile. 
C)  U.S. business cycle fluctuations have become milder. 
D)  U.S. business cycle fluctuations have not changed.

Question 9

Since 1900,real GDP per capita has ________ and this measure ________ the actual growth in standards of living in the United States over this time.

Accepted Answer

A)  increased; understates 
B)  increased; overstates 
C)  decreased; understates 
D)  decreased; overstates 
A)  increased; understates 
B)  increased; overstates 
C)  decreased; understates 
D)  decreased; overstates

Question 10

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 11

Labor productivity is

Accepted Answer

A)  the quantity of output produced in one hour by several workers. 
B)  the quantity of capital one worker can produce in one day. 
C)  the quantity of output produced by one worker or by one hour of work. 
D)  the quantity of output produced in one hour by one machine. 
A)  the quantity of output produced in one hour by several workers. 
B)  the quantity of capital one worker can produce in one day. 
C)  the quantity of output produced by one worker or by one hour of work. 
D)  the quantity of output produced in one hour by one machine.

Question 12

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 13

Which of the following will increase the real interest rate?

Accepted Answer

A)  an increase in the supply of loanable funds 
B)  an increase in household saving 
C)  an increase in the demand for loanable funds 
D)  an increase in the budget surplus 
A)  an increase in the supply of loanable funds 
B)  an increase in household saving 
C)  an increase in the demand for loanable funds 
D)  an increase in the budget surplus

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

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 16

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 17

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

Accepted Answer

A)  a bank 
B)  a pension fund 
C)  an insurance company 
D)  a credit counselor 
A)  a bank 
B)  a pension fund 
C)  an insurance company 
D)  a credit counselor

Question 18

As the economy nears the end of an expansion,interest rates usually ________ and wages rise more ________ than prices.

Accepted Answer

A)  rise; rapidly 
B)  rise; slowly 
C)  fall; rapidly 
D)  fall; slowly 
A)  rise; rapidly 
B)  rise; slowly 
C)  fall; rapidly 
D)  fall; slowly

Question 19

Table 14-1
 $\begin{array}{|c|c|}
\hline \text { Year } & \begin{array}{c}
\text { Real GDP (billions } \
\text { of } 2000 \text { dollars) }
\end{array} \
\hline 2015 & \$ 8,700 \
\hline 2016 & 8,875 \
\hline 2017 & 9,000 \
\hline 2018 & 9,280 \
\hline
\end{array}$
-Refer to Table 14-1.Using the table above,what is the approximate growth rate of real GDP from 2017 to 2018?

Accepted Answer

A)  1% 
B)  2% 
C)  3% 
D)  4% 
A)  1% 
B)  2% 
C)  3% 
D)  4%

Question 20

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.

Financial markets and financial intermediaries comprise the financial system.

A government budget surplus from reduced government spending (no change in net taxes)will the level of investment in the economy and the level of total saving (private plus public)in the economy.

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

Briefly explain how the miserliness of Ebenezer Scrooge might actually be beneficial for economic growth.

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

There is a federal budget deficit when

The demand for loanable funds is downward sloping because the the interest rate,the the number of profitable investment projects a firm can undertake,and the the quantity demanded of loanable funds.

Since the 1950s

Since 1900,real GDP per capita has and this measure the actual growth in standards of living in the United States over this time.

If taxes are less than transfers plus government spending,then

Labor productivity is

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

Which of the following will increase the real interest rate?

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

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

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

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

As the economy nears the end of an expansion,interest rates usually and wages rise more than prices.

Table 14-1 Year Real GDP (billions of 2000 dollars) 2015 \ 8,700 2016 8,875 2017 9,000 2018 9,280 -Refer to Table 14-1.Using the table above,what is the approximate growth rate of real GDP from 2017 to 2018?

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

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

Financial markets and financial intermediaries comprise the financial system.

A government budget surplus from reduced government spending (no change in net taxes)will ________ the level of investment in the economy and ________ the level of total saving (private plus public)in the economy.

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

Briefly explain how the miserliness of Ebenezer Scrooge might actually be beneficial for economic growth.

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

There is a federal budget deficit when

The demand for loanable funds is downward sloping because the ________ the interest rate,the ________ the number of profitable investment projects a firm can undertake,and the ________ the quantity demanded of loanable funds.

Since the 1950s

Since 1900,real GDP per capita has ________ and this measure ________ the actual growth in standards of living in the United States over this time.

If taxes are less than transfers plus government spending,then

Labor productivity is

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

Which of the following will increase the real interest rate?

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

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

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

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

As the economy nears the end of an expansion,interest rates usually ________ and wages rise more ________ than prices.

Table 14-1 Year Real GDP (billions of 2000 dollars) 2015 \ 8,700 2016 8,875 2017 9,000 2018 9,280 -Refer to Table 14-1.Using the table above,what is the approximate growth rate of real GDP from 2017 to 2018?

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

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

A government budget surplus from reduced government spending (no change in net taxes)will the level of investment in the economy and the level of total saving (private plus public)in the economy.

The demand for loanable funds is downward sloping because the the interest rate,the the number of profitable investment projects a firm can undertake,and the the quantity demanded of loanable funds.

Since 1900,real GDP per capita has and this measure the actual growth in standards of living in the United States over this time.

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

As the economy nears the end of an expansion,interest rates usually and wages rise more than prices.