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

Inflation is measured

Empirical evidence shows that the impact of government budget deficits and surpluses on the equilibrium interest rate is quite large.

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

Figure 10-6 -Refer to Figure 10-6.The loanable funds market is in equilibrium,as shown in the figure above.An increase in the supply of loanable funds could result in which of the following combinations of the real interest rate and quantity of loanable funds at a new equilibrium?

What is investment in a closed economy if you have the following economic data? Y = $10 trillion C = $5 trillion TR = $2 trillion G = $2 trillion

Borrowers are ________ of loanable funds,and lenders are ________ of loanable funds.

Using equations for public and private saving,show that saving must equal investment in a closed economy.Begin with the expression for total saving in the economy.

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

In 2003,Congress passed a tax cut that included a reduction in the marginal tax rate on stock dividends.This essentially increased the after-tax rate of return on stocks that offer dividends.Using the loanable funds market,describe what will happen to saving,investment,economic growth,the real interest rate,and the quantity of loanable funds exchanged.

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?

The response of investment spending to an increase in the government budget deficit is called

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

Carefully define the two categories of saving in the economy.

Market economies tend to grow more quickly than centrally-planned economies.

According to the National Bureau of Economic Research,the recession that began in December 2007

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

How does a decrease in the tax rate on income earned on saving affect saving,investment,the interest rate,and economic growth?

A(n)________ comes to an end with a business cycle ________.

What two factors are the keys to determining labor productivity?

According to the National Bureau of Economic Research,the United States has experienced ________ recessions since 1950.