Question 1

Between 1950 and 2009,the average length of recessions in the United States was

Accepted Answer

A)  11 months. 
B)  two years. 
C)  three months. 
D)  eighteen months. 
A)  11 months. 
B)  two years. 
C)  three months. 
D)  eighteen months.

Question 2

When potential GDP increases,is it necessarily the case that real GDP increases as well? Explain.

Accepted Answer

An increase in potential GDP is a result

Question 3

Public saving in the economy can be increased by

Accepted Answer

A)  lowering taxes. 
B)  raising government spending. 
C)  raising taxes. 
D)  raising transfer payments. 
A)  lowering taxes. 
B)  raising government spending. 
C)  raising taxes. 
D)  raising transfer payments.

Question 4

The Congressional Budget Office reported that federal budget deficits in the United States were likely to increase during the next decade,and due to these higher deficits,"the nation's capital stock ultimately would be smaller,and productivity and income would be lower than would be the case if the debt was smaller." This higher budget deficit would be represented graphically by

Accepted Answer

A)  a shift in the supply curve for loanable funds to the right. 
B)  a shift in the supply curve for loanable funds to the left. 
C)  a movement to the right along the supply curve for loanable funds. 
D)  a movement to the left along the supply curve for loanable funds. 
A)  a shift in the supply curve for loanable funds to the right. 
B)  a shift in the supply curve for loanable funds to the left. 
C)  a movement to the right along the supply curve for loanable funds. 
D)  a movement to the left along the supply curve for loanable funds.

Question 5

Explain and show graphically how government deficits can "crowd out" private investment.

Accepted Answer

When the government runs a deficit,publi

Question 6

Which of the following is an example of human capital?

Accepted Answer

A)  a computer 
B)  a factory building 
C)  a college education 
D)  a software program 
A)  a computer 
B)  a factory building 
C)  a college education 
D)  a software program

Question 7

Countries with high rates of economic growth tend to have

Accepted Answer

A)  a labor force that is more productive. 
B)  a lower life expectancy at birth. 
C)  low rates of technological advancement. 
D)  a declining incidence of business cycle fluctuations. 
A)  a labor force that is more productive. 
B)  a lower life expectancy at birth. 
C)  low rates of technological advancement. 
D)  a declining incidence of business cycle fluctuations.

Question 8

The key to sustained economic growth is increasing labor productivity.

Accepted Answer

A) True 
 B)False

Question 9

Explain why a centrally-planned economy might not grow as rapidly as a market economy.

Accepted Answer

Technological change is very important f

Question 10

Define the two categories of saving in the economy.

Accepted Answer

There are two categories of saving in th

Question 11

Potential GDP is defined as

Accepted Answer

A)  the maximum of GDP that the economy can produce. 
B)  the amount of GDP produced if there is no frictional unemployment. 
C)  the level of GDP attained when all firms are producing at capacity. 
D)  the amount of GDP produced if there is no structural unemployment. 
A)  the maximum of GDP that the economy can produce. 
B)  the amount of GDP produced if there is no frictional unemployment. 
C)  the level of GDP attained when all firms are producing at capacity. 
D)  the amount of GDP produced if there is no structural unemployment.

Question 12

Which of the following explains why fluctuations in real GDP have become less volatile in the United States since 1950?

Accepted Answer

A)  Services have become a smaller fraction of GDP since the 1950s. 
B)  Unemployment insurance and other government transfer programs are more prevalent since the 1950s. 
C)  The government has become more reluctant to intervene when real GDP declines and unemployment rises since the 1950s. 
D)  both B and C 
A)  Services have become a smaller fraction of GDP since the 1950s. 
B)  Unemployment insurance and other government transfer programs are more prevalent since the 1950s. 
C)  The government has become more reluctant to intervene when real GDP declines and unemployment rises since the 1950s. 
D)  both B and C

Question 13

Purchases of Huggies diapers should

Accepted Answer

A)  remain fairly constant over the business cycle. 
B)  increase in recessions and decrease in expansions. 
C)  decrease in recessions and increase in expansions. 
D)  increase in recessions and remain constant in expansions. 
A)  remain fairly constant over the business cycle. 
B)  increase in recessions and decrease in expansions. 
C)  decrease in recessions and increase in expansions. 
D)  increase in recessions and remain constant in expansions.

Question 14

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 15

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 16

During the expansion phase of the business cycle

Accepted Answer

A)  production increases. 
B)  employment decreases. 
C)  income decreases. 
D)  unemployment increases. 
A)  production increases. 
B)  employment decreases. 
C)  income decreases. 
D)  unemployment increases.

Question 17

Liquidity refers to

Accepted Answer

A)  the ease with a stock can be traded for a bond. 
B)  the ease with which a financial security can be traded for cash. 
C)  the number of times a dollar changes hands in the creation of GDP in an economy. 
D)  the number of shares of stock a corporation issues. 
A)  the ease with a stock can be traded for a bond. 
B)  the ease with which a financial security can be traded for cash. 
C)  the number of times a dollar changes hands in the creation of GDP in an economy. 
D)  the number of shares of stock a corporation issues.

Question 18

Suppose you are an advisor to the Business Cycle Dating Committee.You are asked to look at macroeconomic data to evaluate whether the economy has entered a recession this year.Which data do you look at? How does the economy behave at the onset of a recession?

Accepted Answer

Since a recession is defined as signific

Question 19

Figure 14-5
  
-Refer to Figure 14-5."Crowding out" of firm investment as a result of a budget deficit is illustrated by the movement from ________ in the graph above.

Accepted Answer

A)  A to B 
B)  B to A 
C)  B to C 
D)  C to A 
A)  A to B 
B)  B to A 
C)  B to C 
D)  C to A

Question 20

A period of economic expansion ends with a business cycle trough.

Accepted Answer

A) True 
 B)False

Between 1950 and 2009,the average length of recessions in the United States was

When potential GDP increases,is it necessarily the case that real GDP increases as well? Explain.

Public saving in the economy can be increased by

Explain and show graphically how government deficits can "crowd out" private investment.

Which of the following is an example of human capital?

Countries with high rates of economic growth tend to have

The key to sustained economic growth is increasing labor productivity.

Explain why a centrally-planned economy might not grow as rapidly as a market economy.

Define the two categories of saving in the economy.

Potential GDP is defined as

Which of the following explains why fluctuations in real GDP have become less volatile in the United States since 1950?

Purchases of Huggies diapers should

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

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?

During the expansion phase of the business cycle

Liquidity refers to

Suppose you are an advisor to the Business Cycle Dating Committee.You are asked to look at macroeconomic data to evaluate whether the economy has entered a recession this year.Which data do you look at? How does the economy behave at the onset of a recession?

Figure 14-5 -Refer to Figure 14-5."Crowding out" of firm investment as a result of a budget deficit is illustrated by the movement from ________ in the graph above.

A period of economic expansion ends with a business cycle trough.

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

Between 1950 and 2009,the average length of recessions in the United States was

When potential GDP increases,is it necessarily the case that real GDP increases as well? Explain.

Public saving in the economy can be increased by

Explain and show graphically how government deficits can "crowd out" private investment.

Which of the following is an example of human capital?

Countries with high rates of economic growth tend to have

The key to sustained economic growth is increasing labor productivity.

Explain why a centrally-planned economy might not grow as rapidly as a market economy.

Define the two categories of saving in the economy.

Potential GDP is defined as

Which of the following explains why fluctuations in real GDP have become less volatile in the United States since 1950?

Purchases of Huggies diapers should

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

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?

During the expansion phase of the business cycle

Liquidity refers to

Suppose you are an advisor to the Business Cycle Dating Committee.You are asked to look at macroeconomic data to evaluate whether the economy has entered a recession this year.Which data do you look at? How does the economy behave at the onset of a recession?

Figure 14-5 -Refer to Figure 14-5."Crowding out" of firm investment as a result of a budget deficit is illustrated by the movement from ________ in the graph above.

A period of economic expansion ends with a business cycle trough.

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