Exam 21: Economic Growth, the Financial System, and Business Cycles

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

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

The U.S. economy has been more stable since 1950.

Table 21-1 -Refer to Table 21-1. Using the table above, what is the approximate average annual growth rate from 2010 to 2013?

An increase in government purchases, ceteris paribus, will

Since the 1950s,

Purchases of which of the following goods would be dramatically reduced during a recession?

If real GDP in a small country in 2012 is $8 billion and real GDP in the same country in 2013 is $8.3 billion, the growth rate of real GDP between 2012 and 2013

How have government policies and programs affected the volatility of the business cycle in the United States since 1950? Explain and provide at least two specific examples of policies or programs that may have had an impact.

Potential GDP refers to

During the expansion phase of the business cycle, which of the following eventually increases?

Which of the following is not a reason why the U.S. economy has been more stable since 1950?

The lengths of the recession and expansion phases and which sectors of the economy are most affected will rarely be the same in any two business cycles.

The period of expansion ends with a ________ and the period of recession ends with a ________.

If net taxes rise by $150 billion, would you expect household saving to fall by $150 billion, by more than $150 billion, or by less than $150 billion?

Figure 21-6 -Refer to Figure 21-6. 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 one difference between stocks and bonds?