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

In an open economy, there is interaction with other economies in terms of both trading of goods and services and borrowing and lending.

If government saving is negative, then

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

The key to sustained economic growth is increasing labour productivity.

Which of the following might make it a good idea for a business to expand during a recession?

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

Actual real GDP will be above potential GDP if

Figure 6.2 Alt text for Figure 6.2: In figure 6.2, a graph comparing loanable funds and real interest rate. Long description for Figure 6.2: The x-axis is labelled, loanable funds (billions of dollars per year), with values L1 and L2 marked.The y-axis is labelled, real interest rate, with values i1 and i2 marked.3 lines are plotted; Demand D1, D2 and Supply.Line D2 begins at the top left corner and slopes down to the bottom centre.Line D1 follows the same slope as D2, but is plotted to the right.The Supply line begins near the origin and slopes up to the top right corner.The area between the lines D1 and D2 is indicated by a right pointing arrow.The Supply line intersects D1 at point A (L1, i1), approximately 3 quarters of the way along both lines.The Supply line intersects D2 at point B (L2, i2)approximately 3 quarters of the way along both lines.Points A and B are connected to their respective coordinates on the x and y-axis with dotted lines.Between these dotted lines, an arrow points left, from L1 toward L2.and another arrow points down, from i1 toward i2. -Refer to Figure 6.2.Which of the following is consistent with the graph depicted above?

For the recessions in Canada since the 1980s,

Outline the various actions the government sector could take to promote growth.

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

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

Financial markets and financial intermediaries comprise the financial system.

Increasing the amount of consumption spending and reducing the amount of savings ________ investment expenditures, and ________ long-run economic growth in the economy.

India's recent rapid growth can be explained by

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 private saving in the economy?

Increases in real GDP since 1961 can actually underestimate growth in the standard of living for Canadians because

In 2016 the federal government was forecast to have a deficit of approximately $30 billion. This meant

Figure 6.5 Alt text for Figure 6.5: In figure 6.5, a graph comparing loanable funds and real interest rate. Long description for Figure 6.5: The x-axis is labelled, loanable funds (billions of dollars per year), and the y-axis is labelled, real interest rate.3 lines are shown; Supply S1, S2 and Demand.The Demand line begins at the top left corner and slopes down to the bottom centre.Line S1 begins near the origin and slopes up to the top right corner.Line S2 follows the same slope as line S1, but is plotted to the left.The area between lines S1 and S2 is indicated by a left pointing arrow.The Demand line intersects line S1 at point A, a little more than half-way along both lines.The Demand line intersects line S2 at point B, a little more than half-way along both lines.Point C is marked on line S2,such that it is parallel to point A.An arrow points from point A to point C. -Refer to Figure 6.5."Crowding out" of firm investment as a result of a budget deficit is illustrated by the movement from ________ in the graph above.

How have government policies and programs affected the volatility of the business cycle in Canada? Explain and provide at least two specific examples of policies or programs that may have had an impact.