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

Figure 10-6 -Refer to Figure 10-6.The loanable funds market is given in the figure above.If the current real interest rate is 5 percent,which of the following is true?

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

Which of the following increases labor productivity?

Which of the following would encourage economic growth through increases in the capital stock?

Which of the following goods would see the largest decline in demand during a recession?

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?

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

If net taxes fall by $80 billion,we would expect

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

The best measure of the standard of living is

A country with no trade and no borrowing and lending relationships with other countries is known as a(n)

If,in an economy experiencing inflation,the government decided to tax real interest income rather than nominal interest income,this change would cause the real interest rate to ________ and the equilibrium quantity of loanable funds to ________.

If an economy is growing at a rate of 2.5% per year,how long will it take the economy to double in size?

The sum of public and private saving in an economy is equal to

Briefly explain how the miserliness of Ebenezer Scrooge might actually be beneficial for economic growth.

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)

Figure 10-6 -Refer to Figure 10-6.The loanable funds market is in equilibrium,as shown in the figure above.As a result of an increase in the government budget deficit,the ________ for loanable funds will ________,thereby ________ the equilibrium real interest rate and ________ the equilibrium quantity of loanable funds.

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

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

The total amount of physical capital available in a country is know as the country's