Question 1

What is productivity? How does a country's standard of living relate to productivity?

Accepted Answer

Productivity refers to the amount of goo

Question 2

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

Accepted Answer

Ebenezer Scrooge is known for his unwill

Question 3

Under which of the following circumstances would the government be running a deficit?

Accepted Answer

A) G = $5 trillion T = $5 trillion
TR = $1 trillion 
B) G = $5 trillion T = $7 trillion
TR = $1 trillion 
C) G = $7 trillion T = $7 trillion
TR = $0 
D) G = $7 trillion T = $10 trillion
TR = $3 trillion 
A) G = $5 trillion T = $5 trillion
TR = $1 trillion 
B) G = $5 trillion T = $7 trillion
TR = $1 trillion 
C) G = $7 trillion T = $7 trillion
TR = $0 
D) G = $7 trillion T = $10 trillion
TR = $3 trillion

Question 4

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.

Accepted Answer

Start with the expression of total savin

Question 5

Retained earnings are always sufficient to finance a firm's rapid expansion in a high-growth economy.

Accepted Answer

A) True 
 B)False

Question 6

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 7

A period of economic expansion ends with a business cycle trough.

Accepted Answer

A) True 
 B)False

Question 8

Inflation is measured

Accepted Answer

A) using the level of the consumer price index. 
B) as the percentage change in the consumer price index. 
C) using the level of real GDP. 
D) as the percentage change in real GDP. 
A) using the level of the consumer price index. 
B) as the percentage change in the consumer price index. 
C) using the level of real GDP. 
D) as the percentage change in real GDP.

Question 9

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

Accepted Answer

A) 60 years 
B) 43 years 
C) 36 years 
D) 28 years 
A) 60 years 
B) 43 years 
C) 36 years 
D) 28 years

Question 10

Figure 21-6  
-Refer to Figure 21-6.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?

Accepted Answer

A) The loanable funds market is in equilibrium. 
B) There is a surplus of loanable funds in the market. 
C) There is a shortage of loanable funds in the market. 
D) The quantity of loanable funds being demanded in the market is less than $90 million. 
A) The loanable funds market is in equilibrium. 
B) There is a surplus of loanable funds in the market. 
C) There is a shortage of loanable funds in the market. 
D) The quantity of loanable funds being demanded in the market is less than $90 million.

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Long-run economic growth requires all of the following except

Accepted Answer

A) technological change. 
B) increases in capital per hour worked. 
C) government provision of secure property rights. 
D) political instability. 
A) technological change. 
B) increases in capital per hour worked. 
C) government provision of secure property rights. 
D) political instability.

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Potential GDP refers to

Accepted Answer

A) the level of GDP attained when all firms are producing at capacity. 
B) the level of GDP attained by the country with the highest growth in real GDP in a given year. 
C) the difference between the highest level of real GDP per quarter and the lowest level of real GDP per quarter within any given year. 
D) the extent to which real GDP is above or below nominal GDP. 
A) the level of GDP attained when all firms are producing at capacity. 
B) the level of GDP attained by the country with the highest growth in real GDP in a given year. 
C) the difference between the highest level of real GDP per quarter and the lowest level of real GDP per quarter within any given year. 
D) the extent to which real GDP is above or below nominal GDP.

Question 15

A firm can fund an expansion of its operations by

Accepted Answer

A) issuing bonds. 
B) buying stock. 
C) paying dividends. 
D) loaning money. 
A) issuing bonds. 
B) buying stock. 
C) paying dividends. 
D) loaning money.

Question 16

Inflation usually increases during a recession and decreases during an expansion.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following indicates that the U.S.economy has become more stable since 1950?

Accepted Answer

A) longer recessions 
B) shorter expansions 
C) less severe fluctuations in real GDP 
D) All of the above indicate that the U.S.economy has become more stable since 1950. 
A) longer recessions 
B) shorter expansions 
C) less severe fluctuations in real GDP 
D) All of the above indicate that the U.S.economy has become more stable since 1950.

Question 18

As the economy nears the end of an expansion,which of the following do we typically see?

Accepted Answer

A) rising firm profits 
B) rising levels of firm investment 
C) rising interest rates 
D) falling wages relative to output prices 
A) rising firm profits 
B) rising levels of firm investment 
C) rising interest rates 
D) falling wages relative to output prices

Question 19

Economic growth depends more on technological change than on increases on capital per hour worked.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

When the government runs a deficit publi

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

What is productivity? How does a country's standard of living relate to productivity?

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

Under which of the following circumstances would the government be running a deficit?

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.

Retained earnings are always sufficient to finance a firm's rapid expansion in a high-growth economy.

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

A period of economic expansion ends with a business cycle trough.

Inflation is measured

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

Figure 21-6 -Refer to Figure 21-6.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?

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

Long-run economic growth requires all of the following except

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

Potential GDP refers to

A firm can fund an expansion of its operations by

Inflation usually increases during a recession and decreases during an expansion.

Which of the following indicates that the U.S.economy has become more stable since 1950?

As the economy nears the end of an expansion,which of the following do we typically see?

Economic growth depends more on technological change than on increases on capital per hour worked.

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

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

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