Question 1

There is public dissaving if

Accepted Answer

A) G + TR > T. B) G + TR G + T. D) TR < G + T. A) G + TR > T. B) G + TR G + T. D) TR < G + T.

Question 2

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?

Accepted Answer

A)  Private saving will increase by the amount of increase in the budget surplus. 
B)  Private saving will decrease by the amount of increase in the budget surplus. 
C)  Private saving will decrease by less than the amount of increase in the budget surplus. 
D)  Private saving will be unaffected by the increase in the budget surplus. 
A)  Private saving will increase by the amount of increase in the budget surplus. 
B)  Private saving will decrease by the amount of increase in the budget surplus. 
C)  Private saving will decrease by less than the amount of increase in the budget surplus. 
D)  Private saving will be unaffected by the increase in the budget surplus.

Question 3

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

Accepted Answer

A)  increases; increases 
B)  increases; decreases 
C)  decreases; increases 
D)  decreases; decreases 
A)  increases; increases 
B)  increases; decreases 
C)  decreases; increases 
D)  decreases; decreases

Question 4

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

Accepted Answer

The government should secure private pro

Question 5

Economist Robert Fogel has estimated that by the year 2040, individuals in the United States will be spending

Accepted Answer

A)  more time in the workforce and more time in leisure activities than they do today. 
B)  less time in the workforce and less time in leisure activities than they do today. 
C)  less time in the workforce and more time in leisure activities than they do today. 
D)  more time in the workforce and less time in leisure activities than they do today. 
A)  more time in the workforce and more time in leisure activities than they do today. 
B)  less time in the workforce and less time in leisure activities than they do today. 
C)  less time in the workforce and more time in leisure activities than they do today. 
D)  more time in the workforce and less time in leisure activities than they do today.

Question 6

The period between a business cycle peak and a business cycle trough is called

Accepted Answer

A)  expansion. 
B)  recession. 
C)  diffusion. 
D)  recalculation. 
A)  expansion. 
B)  recession. 
C)  diffusion. 
D)  recalculation.

Question 7

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

Accepted Answer

A)  demanders; suppliers 
B)  suppliers; demanders 
C)  suppliers; suppliers 
D)  demanders; demanders 
A)  demanders; suppliers 
B)  suppliers; demanders 
C)  suppliers; suppliers 
D)  demanders; demanders

Question 8

Which of the following describes the growth in real GDP per person in the United States from 1900 to the present?

Accepted Answer

A)  It has decreased. 
B)  It has increased by more than eight times. 
C)  It has doubled. 
D)  It has increased twenty times. 
A)  It has decreased. 
B)  It has increased by more than eight times. 
C)  It has doubled. 
D)  It has increased twenty times.

Question 9

Human capital refers to which of the following?

Accepted Answer

A)  the quantity of goods and services that can be produced by one worker or by one hour of work 
B)  the accumulated knowledge and skills workers acquire from education and training or from their life experiences 
C)  manufactured goods that are used to produce other goods and services 
D)  physical equipment that is made by human laborers, not machines 
A)  the quantity of goods and services that can be produced by one worker or by one hour of work 
B)  the accumulated knowledge and skills workers acquire from education and training or from their life experiences 
C)  manufactured goods that are used to produce other goods and services 
D)  physical equipment that is made by human laborers, not machines

Question 10

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 11

Increases in capital per hour worked cannot sustain high rates of economic growth unless accompanied by technological change.

Accepted Answer

A) True 
 B)False

Question 12

There is a government budget surplus if

Accepted Answer

A) T - TR > G. B) G > T. C) G > TR. D) TR < T. A) T - TR > G. B) G > T. C) G > TR. D) TR < T.

Question 13

Suppose that real GDP for 2012 was $10,000 billion and real GDP for 2013 was $9,500 billion. What is the rate of growth of real GDP between 2012 and 2013?

Accepted Answer

A)  -10% 
B)  -5% 
C)  -2% 
D)  -1% 
A)  -10% 
B)  -5% 
C)  -2% 
D)  -1%

Question 14

One difference between stocks and bonds is that

Accepted Answer

A)  stocks are financial securities, while bonds are labor market securities. 
B)  stocks are usually issued in electronic form, while bonds are usually issued in paper form. 
C)  stocks represent ownership in companies, while bonds represent ownership in banks. 
D)  stocks do not involve a promise to repay a purchaser of the stock, while bonds represent a promise to repay the purchase price of the bond. 
A)  stocks are financial securities, while bonds are labor market securities. 
B)  stocks are usually issued in electronic form, while bonds are usually issued in paper form. 
C)  stocks represent ownership in companies, while bonds represent ownership in banks. 
D)  stocks do not involve a promise to repay a purchaser of the stock, while bonds represent a promise to repay the purchase price of the bond.

Question 15

Explain why a centrally-planned economy might not grow as rapidly as a market economy.

Accepted Answer

Technological change is very important f

Question 16

According to the "Rule of 70," it will take 4 years for real GDP per capita to double when the growth rate of real GDP per capita is

Accepted Answer

A)  4 percent. 
B)  12.25 percent. 
C)  17.5 percent. 
D)  28 percent. 
A)  4 percent. 
B)  12.25 percent. 
C)  17.5 percent. 
D)  28 percent.

Question 17

Since 1950, the average length of a recession in the United States has been

Accepted Answer

A)  such that recessions barely exist. 
B)  less than a year. 
C)  between 1 and 2 years. 
D)  greater than 2 years. 
A)  such that recessions barely exist. 
B)  less than a year. 
C)  between 1 and 2 years. 
D)  greater than 2 years.

Question 18

Which of the following would increase public saving?

Accepted Answer

A)  an increase in taxes 
B)  an increase in transfers 
C)  an increase in government purchases 
D)  All of the above would increase public saving. 
A)  an increase in taxes 
B)  an increase in transfers 
C)  an increase in government purchases 
D)  All of the above would increase public saving.

Question 19

Which of the following does not describe governmental policy actions that are helpful in supporting growth in an economy? Governmental policies that

Accepted Answer

A)  avoid playing any role in developing communication systems. 
B)  provide secure rights to private property. 
C)  establish an independent court system that enforces contracts. 
D)  facilitate the development of an efficient financial system. 
A)  avoid playing any role in developing communication systems. 
B)  provide secure rights to private property. 
C)  establish an independent court system that enforces contracts. 
D)  facilitate the development of an efficient financial system.

Question 20

Figure 21-4  
-Refer to Figure 21-4. Which of the following is consistent with the graph depicted?

Accepted Answer

A)  an increase in household income 
B)  an increase in transfer payments to households 
C)  an increase in the proportion of income after net taxes used for consumption 
D)  an increase in tax revenues collected by the government 
A)  an increase in household income 
B)  an increase in transfer payments to households 
C)  an increase in the proportion of income after net taxes used for consumption 
D)  an increase in tax revenues collected by the government

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

There is public dissaving if

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?

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

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

Economist Robert Fogel has estimated that by the year 2040, individuals in the United States will be spending

The period between a business cycle peak and a business cycle trough is called

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

Which of the following describes the growth in real GDP per person in the United States from 1900 to the present?

Human capital refers to which of the following?

There is a federal budget deficit when

Increases in capital per hour worked cannot sustain high rates of economic growth unless accompanied by technological change.

There is a government budget surplus if

Suppose that real GDP for 2012 was $10,000 billion and real GDP for 2013 was $9,500 billion. What is the rate of growth of real GDP between 2012 and 2013?

One difference between stocks and bonds is that

Explain why a centrally-planned economy might not grow as rapidly as a market economy.

According to the "Rule of 70," it will take 4 years for real GDP per capita to double when the growth rate of real GDP per capita is

Since 1950, the average length of a recession in the United States has been

Which of the following would increase public saving?

Which of the following does not describe governmental policy actions that are helpful in supporting growth in an economy? Governmental policies that

Figure 21-4 -Refer to Figure 21-4. Which of the following is consistent with the graph depicted?

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

Externalities, Environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

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

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

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