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

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

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

Which of the following explains the cause of the change in the unemployment rate at the end of a recession?

Explain and show graphically how an increase in household saving affects the equilibrium interest rate and the equilibrium quantity of loanable funds.

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

Figure 21-3 -Refer to Figure 21-3.Which of the following is consistent with the graph depicted above?

Since the 1950s

An increase in the real interest rate does which of the following?

When the economy enters a recessionary phase of the business cycle,unemployment tends to

Table 21-1 Year Real GDP (billions of 2000 dollars) 2013 \ 8,700 2014 8,875 2015 9,000 2016 9,280 -Refer to Table 21-1.Using the table above,what is the approximate growth rate of real GDP from 2015 to 2016?

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 higher budget deficit would be represented graphically by

India's rapid growth can be explained by

Which of the following financial securities is most liquid?

Figure 21-1 -Refer to Figure 21-1.Which of the following is consistent with the graph depicted above?

A period of expansion in the business cycle ends when

What is the name of the organization that defines business cycle peaks and troughs in the United States?

Using the market for loanable funds,which of the following has the potential to raise the real interest rate?

If taxes are less than transfers plus government spending,then

The growth rate of real GDP in the United States rises from 4.2% to 4.4%.Explain and calculate how this increase in the growth rate of real GDP affects the number of years it will take for real GDP to double.

In comparison to a government that runs a balanced budget,when the government runs a budget deficit