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

The key to sustained economic growth is increasing labor productivity.

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?

When potential GDP increases,is it necessarily the case that real GDP increases as well? Explain.

In an open economy,the relationship between GDP (Y)and expenditures is Y = C + I + G.

Article Summary According to the Office for National Statistics in the United Kingdom,productivity in the UK in 2014 was well below the average of the G7 countries,only faring better than Japan.The G7 is a group of the seven most industrialized countries,and includes Canada,France,Germany,Italy,Japan,the United Kingdom,and the United States.Compared to the G7 average,the UK was 20% less productive per hour worked,and output was also 20% worse when measured on a per worker basis.The productivity gap was the largest for the UK since estimates began in 1991.Worker productivity was lower in all of the G7 nations in 2014 than it would have been had trends prior to the 2007-2009 recession continued,with the productivity gap of 18 percent in the UK significantly higher than the 7% gap for the other G7 nations.In terms of output per hour worked,the UK was behind Germany,France,and the United States by 32 to 33 percentage points. -Refer to the Article Summary.________ depend on increases in labor productivity.

The Congressional Budget Office reported that federal budget deficits in the United States were likely to increase in future years,and these higher deficits might "pose a threat to the economy by crowding out business investment and threatening a spike in interest rates." This crowding out of business investment would be represented graphically by

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

The supply of loanable funds has a ________ slope because the greater the interest rate,the ________ the reward to saving,and the ________ the quantity of loanable funds supplied.

What factors increase potential GDP? Include a definition of potential GDP in your answer.

In terms of economic growth,the key measure of the standard of living is

If real GDP per capita doubles between 2005 and 2020,what is the average annual growth rate of real GDP per capita?

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

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

Since 1950,expansions in the United States have become ________,while recessions have become ________.

If government purchases are $400 million,taxes are $700 million,and transfers are $200 million,which of the following is true?

If consumers decide to be more frugal and save more out of their income,then this will cause

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

Private saving is defined as

Which of the following would you expect to increase the equilibrium interest rate?

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