Exam 6: Economic Growth, The Financial System, and Business Cycles

Scenario 6.1 Consider the following data for a closed economy: Y = $1 200 billion C = $800 billion I = $200 billion G = $200 billion TR = $200 billion T = $300 billion -Refer to Scenario 6.1.Based on the information above, what is the level of public saving?

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.

Retained earnings are sufficient to finance a firm's rapid expansion in a high-growth economy.

If government purchases are $400 million, taxes are $700 million, and transfers are $200 million, which of the following is true?

An increase in labour productivity

Explain and show graphically how a decrease in government spending affects the equilibrium interest rate and equilibrium quantity of loanable funds in the market for loanable funds.

When the government runs a budget deficit, we would expect to see that

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

If the federal government regulated airline ticket prices to prevent them from falling during a recession, there would be a ________ of airline tickets which would likely ________ the airline profits.

Which of the following changes would be most beneficial to a saver?

Canada was in recession during

Which of the following is not a challenge to India's continued economic growth?

Use the equations for public and private saving to demonstrate how total saving in the economy equals investment.

Table 6.2 -Refer to Table 6.2.Using the table above, what is the approximate average annual growth rate from 2012 to 2015?

Explain and show graphically how a decrease in household saving affects the equilibrium interest rate and the equilibrium quantity of loanable funds.

A decrease in the real interest rate will

How would the equilibrium interest rate respond to a change from an income tax to a consumption tax?

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

In July 2016 CIBC (a bank)sold bonds with a negative nominal interest rate. The most likely explanation is

Explain what happens to inflation during the business cycle.Give an intuitive explanation as to why inflation changes the way it does over the business cycle.