Question 1

If GDP is currently $13 trillion and is growing at a rate of 2.3% per year,how long will it take GDP to reach $26 trillion?

Accepted Answer

A) about 15 years 
B) about 17 years 
C) about 25 years 
D) about 30 years 
A) about 15 years 
B) about 17 years 
C) about 25 years 
D) about 30 years

Question 2

Which of the following financial securities is most liquid?

Accepted Answer

A) a savings account 
B) a share of stock 
C) a cashier's check 
D) a $20 bill 
A) a savings account 
B) a share of stock 
C) a cashier's check 
D) a $20 bill

Question 3

There is a federal budget deficit when

Accepted Answer

A) the government spends less that it collects in taxes. 
B) the government spends more that it collects in taxes. 
C) the government spends the same amount it collects in taxes. 
D) taxes are too high. 
A) the government spends less that it collects in taxes. 
B) the government spends more that it collects in taxes. 
C) the government spends the same amount it collects in taxes. 
D) taxes are too high.

Question 4

In a closed economy

Accepted Answer

A) I = Y - C - G. 
B) I = Y + C - G. 
C) I = Y - C + G. 
D) I = Y + C + G. 
A) I = Y - C - G. 
B) I = Y + C - G. 
C) I = Y - C + G. 
D) I = Y + C + G.

Question 5

Countries without well-developed financial systems are able to sustain high levels of economic growth.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) Risk 
B) The face value 
C) Liquidity 
D) The rate of return 
A) Risk 
B) The face value 
C) Liquidity 
D) The rate of return

Question 7

In a closed economy,what is the relationship between saving and investment?

Accepted Answer

A) Saving is greater than investment. 
B) Investment is greater than saving. 
C) Investment is equal to saving. 
D) Investment may be greater or smaller than saving. 
A) Saving is greater than investment. 
B) Investment is greater than saving. 
C) Investment is equal to saving. 
D) Investment may be greater or smaller than saving.

Question 8

The Business Cycle Dating Committee defines a recession as

Accepted Answer

A) two consecutive quarters of declining real GDP. 
B) two consecutive quarters of declining nominal GDP. 
C) a significant decline in activity visible in industrial production,employment,real income,and wholesale/retail trade lasting more than a few months. 
D) a significant decline in inflation and unemployment lasting more than a few months. 
A) two consecutive quarters of declining real GDP. 
B) two consecutive quarters of declining nominal GDP. 
C) a significant decline in activity visible in industrial production,employment,real income,and wholesale/retail trade lasting more than a few months. 
D) a significant decline in inflation and unemployment lasting more than a few months.

Question 9

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)

Accepted Answer

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

Question 10

During a recession,spending on ________ tends to fall more dramatically than spending on ________.

Accepted Answer

A) necessities; luxuries 
B) durable goods; nondurable goods 
C) nondurable goods; durable goods 
D) food; cars 
A) necessities; luxuries 
B) durable goods; nondurable goods 
C) nondurable goods; durable goods 
D) food; cars

Question 11

Financial markets and financial intermediaries comprise the financial system.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) After 1950,the length of expansions equaled the length of recessions. 
B) After 1950,the length of expansions were much less than the length of recessions. 
C) After 1950,the length of expansions were much longer than the length of recessions. 
D) After 1950,the length of expansions were brief and almost nonexistent. 
A) After 1950,the length of expansions equaled the length of recessions. 
B) After 1950,the length of expansions were much less than the length of recessions. 
C) After 1950,the length of expansions were much longer than the length of recessions. 
D) After 1950,the length of expansions were brief and almost nonexistent.

Question 13

If labor productivity growth slows down in a country,this will

Accepted Answer

A) accelerate the increase in real GDP per capita. 
B) accelerate the increase in nominal GDP. 
C) slow down the increase in real GDP per capita. 
D) slow down the increase in nominal GDP. 
A) accelerate the increase in real GDP per capita. 
B) accelerate the increase in nominal GDP. 
C) slow down the increase in real GDP per capita. 
D) slow down the increase in nominal GDP.

Question 14

Labor productivity will increase if the ________ increases and ________.

Accepted Answer

A) quantity of capital per hour worked; technology improves 
B) quantity of labor per unit of capital; technology improves 
C) quantity of capital per hour worked; immigration increases while capital is fixed 
D) quantity of labor per unit of capital; immigration increases while capital is fixed 
A) quantity of capital per hour worked; technology improves 
B) quantity of labor per unit of capital; technology improves 
C) quantity of capital per hour worked; immigration increases while capital is fixed 
D) quantity of labor per unit of capital; immigration increases while capital is fixed

Question 15

The demand for loanable funds is determined by the willingness of ________ to borrow money to engage in new investment projects.

Accepted Answer

A) government 
B) households 
C) banks 
D) firms 
A) government 
B) households 
C) banks 
D) firms

Question 16

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 17

Suppose you are a famous international economic advisor.You have been asked to asses the possibilities for growth in an African country.It is a country abundant in labor and some natural resources.The capital-to-labor ratio is low.It has a free market economy.You have found that this country does not have a very strong and healthy banking system,however the political system is stable and the government does a good job protecting property rights.Assess this country's prospects for growth.Recommend two things that would enhance the country's growth.

Accepted Answer

The prospects for this country's growth

Question 18

When a recession ends

Accepted Answer

A) interest rates decrease. 
B) households decrease spending on durable goods. 
C) the household sector decreases spending substantially. 
D) firms increase the amount of borrowing. 
A) interest rates decrease. 
B) households decrease spending on durable goods. 
C) the household sector decreases spending substantially. 
D) firms increase the amount of borrowing.

Question 19

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

Accepted Answer

A) $10 billion 
B) $30 billion 
C) $40 billion 
D) $70 billion 
A) $10 billion 
B) $30 billion 
C) $40 billion 
D) $70 billion

Question 20

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

If GDP is currently $13 trillion and is growing at a rate of 2.3% per year,how long will it take GDP to reach $26 trillion?

Which of the following financial securities is most liquid?

There is a federal budget deficit when

In a closed economy

Countries without well-developed financial systems are able to sustain high levels of economic growth.

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

In a closed economy,what is the relationship between saving and investment?

The Business Cycle Dating Committee defines a recession as

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)

During a recession,spending on tends to fall more dramatically than spending on .

Financial markets and financial intermediaries comprise the financial system.

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

If labor productivity growth slows down in a country,this will

Labor productivity will increase if the increases and .

The demand for loanable funds is determined by the willingness of ________ to borrow money to engage in new investment projects.

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

When a recession ends

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

Which of the following is an example of human capital?

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

GDP: Measuring Total Production and Income

Unemployment and Inflation

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 10: Economic Growth, the Financial System, and Business Cycles

If GDP is currently $13 trillion and is growing at a rate of 2.3% per year,how long will it take GDP to reach $26 trillion?

Which of the following financial securities is most liquid?

There is a federal budget deficit when

In a closed economy

Countries without well-developed financial systems are able to sustain high levels of economic growth.

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

In a closed economy,what is the relationship between saving and investment?

The Business Cycle Dating Committee defines a recession as

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)

During a recession,spending on ________ tends to fall more dramatically than spending on ________.

Financial markets and financial intermediaries comprise the financial system.

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

If labor productivity growth slows down in a country,this will

Labor productivity will increase if the ________ increases and ________.

The demand for loanable funds is determined by the willingness of ________ to borrow money to engage in new investment projects.

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

When a recession ends

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

Which of the following is an example of human capital?

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

GDP: Measuring Total Production and Income

Unemployment and Inflation

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

During a recession,spending on tends to fall more dramatically than spending on .

Labor productivity will increase if the increases and .