Question 1

During the expansion phase of the business cycle,which of the following eventually increases?

Accepted Answer

A)  production 
B)  employment 
C)  income 
D)  all of the above 
A)  production 
B)  employment 
C)  income 
D)  all of the above

Question 2

Actual real GDP will be above potential GDP if

Accepted Answer

A)  firms are producing below capacity. 
B)  firms are producing at capacity. 
C)  firms are producing above capacity. 
D)  inflation is rising. 
A)  firms are producing below capacity. 
B)  firms are producing at capacity. 
C)  firms are producing above capacity. 
D)  inflation is rising.

Question 3

The federal budget deficit can be reduced by

Accepted Answer

A)  raising taxes. 
B)  raising government spending. 
C)  raising transfer payments. 
D)  higher interest rates. 
A)  raising taxes. 
B)  raising government spending. 
C)  raising transfer payments. 
D)  higher interest rates.

Question 4

________ 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 5

Potential GDP was estimated to grow at a rate of 3.2% from 1949-2017 in the United States.Actual GDP in the U.S.

Accepted Answer

A)  always grows at a slower rate than potential GDP. 
B)  always grows at a faster rate than potential GDP. 
C)  always grows at the same rate as potential GDP. 
D)  is the same as potential GDP if all firms in the economy were working at capacity. 
A)  always grows at a slower rate than potential GDP. 
B)  always grows at a faster rate than potential GDP. 
C)  always grows at the same rate as potential GDP. 
D)  is the same as potential GDP if all firms in the economy were working at capacity.

Question 6

What is labor productivity? How does a country's standard of living relate to labor productivity?

Accepted Answer

Labor productivity refers to the amount

Question 7

Private saving is defined as

Accepted Answer

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

Question 8

Which of the following will result in an increase in labor productivity?

Accepted Answer

A)  a decrease in the number of people attending institutions of higher education 
B)  a decline in the amount of human capital per worker 
C)  an increase in technology 
D)  a decline in the capital stock per hour worked 
A)  a decrease in the number of people attending institutions of higher education 
B)  a decline in the amount of human capital per worker 
C)  an increase in technology 
D)  a decline in the capital stock per hour worked

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

The economic effects of a recession are likely to have the smallest impact on the sales of which of the following businesses?

Accepted Answer

A)  an automobile manufacturer 
B)  a furniture store 
C)  a fast-food restaurant 
D)  a home builder 
A)  an automobile manufacturer 
B)  a furniture store 
C)  a fast-food restaurant 
D)  a home builder

Question 11

Increases in real GDP since 1900 can actually underestimate growth in the standard of living for Americans since 1900 because

Accepted Answer

A)  the level of pollution in 1900 was much higher than it is today. 
B)  the crime rate was higher in 1900 than it is today. 
C)  goods and services are more expensive today as compared to 1900. 
D)  the quality of health care that exists today was not available in 1900. 
A)  the level of pollution in 1900 was much higher than it is today. 
B)  the crime rate was higher in 1900 than it is today. 
C)  goods and services are more expensive today as compared to 1900. 
D)  the quality of health care that exists today was not available in 1900.

Question 12

If the CPI is currently 202,what does this tell you about inflation between last year and this year?

Accepted Answer

A)  There was deflation in the economy between this year and last year. 
B)  Inflation in the economy between this year and last year was 2%. 
C)  Inflation in the economy between this year and last year was 102%. 
D)  The CPI measures only the level of prices in a given year, not the percentage change in prices from one year to the next. 
A)  There was deflation in the economy between this year and last year. 
B)  Inflation in the economy between this year and last year was 2%. 
C)  Inflation in the economy between this year and last year was 102%. 
D)  The CPI measures only the level of prices in a given year, not the percentage change in prices from one year to the next.

Question 13

Which of the following increases labor productivity?

Accepted Answer

A)  an increase in the aggregate hours of work 
B)  decreases in the availability of computers and factory buildings 
C)  inventions of new machinery, equipment, or software 
D)  a decline in the health of the population 
A)  an increase in the aggregate hours of work 
B)  decreases in the availability of computers and factory buildings 
C)  inventions of new machinery, equipment, or software 
D)  a decline in the health of the population

Question 14

How are unemployment,inflation,and the business cycle related?

Accepted Answer

A recessionary phase of a business cycle

Question 15

According to the National Bureau of Economic Research,the recession that began in December 2007

Accepted Answer

A)  lasted 12 months. 
B)  lasted 18 months. 
C)  lasted 27 months. 
D)  did not end until December 2011. 
A)  lasted 12 months. 
B)  lasted 18 months. 
C)  lasted 27 months. 
D)  did not end until December 2011.

Question 16

Potential GDP is always greater than real GDP in an economy.

Accepted Answer

A) True 
 B)False

Question 17

Figure 14-2
  
-Refer to Figure 14-2.Which of the following is consistent with the graph depicted above?

Accepted Answer

A)  An expected expansion increases the profitability of new investment. 
B)  The government runs a budget surplus. 
C)  Investment spending is declining due to crowding out. 
D)  New government regulations decrease the profitability of new investment. 
A)  An expected expansion increases the profitability of new investment. 
B)  The government runs a budget surplus. 
C)  Investment spending is declining due to crowding out. 
D)  New government regulations decrease the profitability of new investment.

Question 18

Figure 14-1
  
-Refer to Figure 14-1.Which of the following is consistent with the graph depicted above?

Accepted Answer

A)  An expected recession decreases the profitability of new investment. 
B)  Technological change increases the profitability of new investment. 
C)  The government runs a budget surplus. 
D)  Households become spendthrifts and begin to save less. 
A)  An expected recession decreases the profitability of new investment. 
B)  Technological change increases the profitability of new investment. 
C)  The government runs a budget surplus. 
D)  Households become spendthrifts and begin to save less.

Question 19

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 20

Which of the following explains why employment only rises at a slow pace at the end of a recession?

Accepted Answer

A)  Firms are hesitant to rehire laid off workers as they continue to operate below capacity. 
B)  Firms rapidly hire new workers at the first sign of an increase in demand for their goods. 
C)  Discouraged workers return to the labor force, and this makes the unemployment rate fall. 
D)  Discouraged workers leave the labor force, and this makes the unemployment rate rise. 
A)  Firms are hesitant to rehire laid off workers as they continue to operate below capacity. 
B)  Firms rapidly hire new workers at the first sign of an increase in demand for their goods. 
C)  Discouraged workers return to the labor force, and this makes the unemployment rate fall. 
D)  Discouraged workers leave the labor force, and this makes the unemployment rate rise.

During the expansion phase of the business cycle,which of the following eventually increases?

Actual real GDP will be above potential GDP if

The federal budget deficit can be reduced by

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

Potential GDP was estimated to grow at a rate of 3.2% from 1949-2017 in the United States.Actual GDP in the U.S.

What is labor productivity? How does a country's standard of living relate to labor productivity?

Private saving is defined as

Which of the following will result in an increase in labor productivity?

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

The economic effects of a recession are likely to have the smallest impact on the sales of which of the following businesses?

Increases in real GDP since 1900 can actually underestimate growth in the standard of living for Americans since 1900 because

If the CPI is currently 202,what does this tell you about inflation between last year and this year?

Which of the following increases labor productivity?

How are unemployment,inflation,and the business cycle related?

According to the National Bureau of Economic Research,the recession that began in December 2007

Potential GDP is always greater than real GDP in an economy.

Figure 14-2 -Refer to Figure 14-2.Which of the following is consistent with the graph depicted above?

Figure 14-1 -Refer to Figure 14-1.Which of the following is consistent with the graph depicted above?

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

Which of the following explains why employment only rises at a slow pace at the end of a recession?

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

During the expansion phase of the business cycle,which of the following eventually increases?

Actual real GDP will be above potential GDP if

The federal budget deficit can be reduced by

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

Potential GDP was estimated to grow at a rate of 3.2% from 1949-2017 in the United States.Actual GDP in the U.S.

What is labor productivity? How does a country's standard of living relate to labor productivity?

Private saving is defined as

Which of the following will result in an increase in labor productivity?

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

The economic effects of a recession are likely to have the smallest impact on the sales of which of the following businesses?

Increases in real GDP since 1900 can actually underestimate growth in the standard of living for Americans since 1900 because

If the CPI is currently 202,what does this tell you about inflation between last year and this year?

Which of the following increases labor productivity?

How are unemployment,inflation,and the business cycle related?

According to the National Bureau of Economic Research,the recession that began in December 2007

Potential GDP is always greater than real GDP in an economy.

Figure 14-2 -Refer to Figure 14-2.Which of the following is consistent with the graph depicted above?

Figure 14-1 -Refer to Figure 14-1.Which of the following is consistent with the graph depicted above?

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

Which of the following explains why employment only rises at a slow pace at the end of a recession?

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