Exam 14: Economic Growth, The Financial System, and Business Cycles

Figure 14-6 -Refer to Figure 14-6.The loanable funds market is in equilibrium,as shown in the figure above.As a result of an increase in the government budget deficit,the ________ for loanable funds will ________,thereby ________ the equilibrium real interest rate and ________ the equilibrium quantity of loanable funds.

According to the U.S. Department of Labor, nonfarm labor productivity rose at an annualized rate of 0.9 percent in the second quarter of 2017 as hours worked and output per worker both rose at their fastest pace in 18 months. Compared to the same quarter in 2016, productivity increased at a rate of 1.2 percent, its best performance in two years., while unit labor costs fell at a rate of 0.2 percent. From 2007 to 2016, labor productivity increased at an average annual rate of 1.2 percent, well below its long-term growth rate of 2.1 percent from 1947 to 2016. This is an indication of a decline in the potential growth rate, blamed in part on a shortage of workers and low capital expenditure. Source: Lucia Mutikani, "U.S. productivity rises in second quarter, keeps labor costs in check," reuters.com, August 9, 2017. -Refer to the Article Summary.In the second quarter of 2017,labor productivity in the United States rose at its fastest pace in 18 months.Labor productivity is important for an economy because an increase in labor productivity

Explain how unemployment changes over the business cycle.Why do these changes occur?

________ is the ease with which a financial security can be exchanged for money.

A good measure of the standard of living is

Which of the following is most liquid?

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

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

Human capital refers to which of the following?

Use the rule of 70 to illustrate how small differences in growth rates can have a large impact on how rapidly the standard of living in a country increases.

In a closed economy

An increase in the real interest rate does which of the following?

Which of the following is a true statement about the length of recessions and expansions in the United States economy?

A period of expansion in the business cycle ends when

In a closed economy,public saving is equal to which of the following? (Y = GDP,C = Consumption,G = Government purchases,T = Taxes,and TR = Transfers)

In a closed economy,private saving is equal to which of the following? (Y = GDP,C = Consumption,G = Government purchases,T = Taxes,and TR = Transfers)

Which of the following statements about the budget deficit is true?

Technological advances generally result in

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

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