Question 1

If Ebenezer Scrooge spends rather than saves his vast wealth he will

Accepted Answer

A) slow economic growth because he is reducing the amount of funds available for investment. 
B) slow economic growth because he is increasing the amount of funds available for investment. 
C) promote economic growth because he is increasing the amount of funds available for investment. 
D) promote economic growth because he is decreasing the amount of funds available for investment. 
A) slow economic growth because he is reducing the amount of funds available for investment. 
B) slow economic growth because he is increasing the amount of funds available for investment. 
C) promote economic growth because he is increasing the amount of funds available for investment. 
D) promote economic growth because he is decreasing the amount of funds available for investment.

Question 2

A good measure of the standard of living is

Accepted Answer

A) real GDP per capita. 
B) nominal GDP per capita. 
C) total real GDP. 
D) total nominal GDP. 
A) real GDP per capita. 
B) nominal GDP per capita. 
C) total real GDP. 
D) total nominal GDP.

Question 3

If government saving is negative,then

Accepted Answer

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

Question 4

When the government runs a budget deficit,we would expect to see that

Accepted Answer

A) private saving will fall. 
B) investment will fall. 
C) G + TR < T. 
D) public saving is positive. 
A) private saving will fall. 
B) investment will fall. 
C) G + TR < T. 
D) public saving is positive.

Question 5

Figure 14-3  
-Refer to Figure 14-3.Which of the following is consistent with the graph depicted above?

Accepted Answer

A) Taxes are changed so that real interest income is taxed rather than nominal interest income. 
B) An expected recession decreases the profitability of new investment. 
C) The government runs a budget deficit. 
D) Technological change increases the profitability of new investment. 
A) Taxes are changed so that real interest income is taxed rather than nominal interest income. 
B) An expected recession decreases the profitability of new investment. 
C) The government runs a budget deficit. 
D) Technological change increases the profitability of new investment.

Question 6

Purchases of Huggies diapers should

Accepted Answer

A) remain fairly constant over the business cycle. 
B) increase in recessions and decrease in expansions. 
C) decrease in recessions and increase in expansions. 
D) increase in recessions and remain constant in expansions. 
A) remain fairly constant over the business cycle. 
B) increase in recessions and decrease in expansions. 
C) decrease in recessions and increase in expansions. 
D) increase in recessions and remain constant in expansions.

Question 7

Explain how unemployment changes over the business cycle.Why do these changes occur?

Accepted Answer

Unemployment will fall during an expansi

Question 8

Which of the following would contribute to a sustained high rate of economic growth in the long run in an economy?

Accepted Answer

A) growth in capital per hour accompanied by technological change 
B) increases in labor force participation rates as workers who are out of the labor force pursue rising wages 
C) a shift of workers in the economy from the agricultural sector to the nonagricultural sector 
D) an influx of immigrant labor into an economy without any accompanying technological change 
A) growth in capital per hour accompanied by technological change 
B) increases in labor force participation rates as workers who are out of the labor force pursue rising wages 
C) a shift of workers in the economy from the agricultural sector to the nonagricultural sector 
D) an influx of immigrant labor into an economy without any accompanying technological change

Question 9

The effect of a recession on a company like Boeing Aircraft is such that

Accepted Answer

A) sales decline more sharply for Boeing as compared to firms that do not produce durable goods. 
B) profits fall less sharply as compared to firms that do not produce durable goods. 
C) the decline in sales is more short-lived as compared to firms that do not produce durable goods. 
D) there is no difference in the impact of the recession on its profits as compared to firms that do not produce durable goods. 
A) sales decline more sharply for Boeing as compared to firms that do not produce durable goods. 
B) profits fall less sharply as compared to firms that do not produce durable goods. 
C) the decline in sales is more short-lived as compared to firms that do not produce durable goods. 
D) there is no difference in the impact of the recession on its profits as compared to firms that do not produce durable goods.

Question 10

How are unemployment,inflation,and the business cycle related?

Accepted Answer

A recessionary phase of a business cycle

Question 11

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.

Accepted Answer

Government programs like unemployment in

Question 12

Financial securities that represent promises to repay a fixed amount of funds are known as

Accepted Answer

A) bonds. 
B) stocks. 
C) pension funds. 
D) insurance premiums. 
A) bonds. 
B) stocks. 
C) pension funds. 
D) insurance premiums.

Question 13

A government budget surplus from reduced government spending (no change in net taxes)will ________ the level of investment in the economy and ________ the level of saving (private plus public)in the economy.

Accepted Answer

A) increase;decrease 
B) increase;increase 
C) decrease;increase 
D) decrease;decrease 
A) increase;decrease 
B) increase;increase 
C) decrease;increase 
D) decrease;decrease

Question 14

Since the 1950s,

Accepted Answer

A) the United States has not experienced a business cycle. 
B) U.S.business cycle fluctuations have becomes more volatile. 
C) U.S.business cycle fluctuations have become milder. 
D) U.S.business cycle fluctuations have not changed. 
A) the United States has not experienced a business cycle. 
B) U.S.business cycle fluctuations have becomes more volatile. 
C) U.S.business cycle fluctuations have become milder. 
D) U.S.business cycle fluctuations have not changed.

Question 15

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 16

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 17

Liquidity refers to

Accepted Answer

A) the ease with a stock can be traded for a bond. 
B) the ease with which a financial security can be traded for cash. 
C) the number of times a dollar changes hands in the creation of GDP in an economy. 
D) the number of shares of stock a corporation issues. 
A) the ease with a stock can be traded for a bond. 
B) the ease with which a financial security can be traded for cash. 
C) the number of times a dollar changes hands in the creation of GDP in an economy. 
D) the number of shares of stock a corporation issues.

Question 18

Scenario 14-1
Consider the following data for a closed economy:
Y = $12 trillion
C = $8 trillion
I= $2 trillion
G = $2 trillion
TR = $2 trillion
T = $3 trillion
-Refer to Scenario 14-1.Based on the information above,what is the level of public saving?

Accepted Answer

A) $0 
B) $1 trillion 
C) $2 trillion 
D) negative $1 trillion (a deficit of $1 trillion) 
A) $0 
B) $1 trillion 
C) $2 trillion 
D) negative $1 trillion (a deficit of $1 trillion)

Question 19

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

Accepted Answer

A) an increase in the percentage of income after net taxes that households save 
B) an increase in the budget deficit 
C) a decrease in the profitability of investment projects firms are considering 
D) a change from an income tax to a consumption tax 
A) an increase in the percentage of income after net taxes that households save 
B) an increase in the budget deficit 
C) a decrease in the profitability of investment projects firms are considering 
D) a change from an income tax to a consumption tax

Question 20

If you invest $10,000 in a bond that earns 8% interest per year,how many years will it take to double your money?

Accepted Answer

A) 1 year and 3 months 
B) 2 years and 6 months 
C) 8 years 
D) 8 years and 9 months 
A) 1 year and 3 months 
B) 2 years and 6 months 
C) 8 years 
D) 8 years and 9 months

If Ebenezer Scrooge spends rather than saves his vast wealth he will

A good measure of the standard of living is

If government saving is negative,then

When the government runs a budget deficit,we would expect to see that

Figure 14-3 -Refer to Figure 14-3.Which of the following is consistent with the graph depicted above?

Purchases of Huggies diapers should

Explain how unemployment changes over the business cycle.Why do these changes occur?

Which of the following would contribute to a sustained high rate of economic growth in the long run in an economy?

The effect of a recession on a company like Boeing Aircraft is such that

How are unemployment,inflation,and the business cycle related?

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.

Financial securities that represent promises to repay a fixed amount of funds are known as

A government budget surplus from reduced government spending (no change in net taxes)will the level of investment in the economy and the level of saving (private plus public)in the economy.

Since the 1950s,

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

A firm can fund an expansion of its operations by

Liquidity refers to

Scenario 14-1 Consider the following data for a closed economy: Y = $12 trillion C = $8 trillion I= $2 trillion G = $2 trillion TR = $2 trillion T = $3 trillion -Refer to Scenario 14-1.Based on the information above,what is the level of public saving?

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

If you invest $10,000 in a bond that earns 8% interest per year,how many years will it take to double your money?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology,production,and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage,international Trade,and Exchange Rates

Filters

Exam 14: Economic Growth, the Financial System, and Business Cycles

If Ebenezer Scrooge spends rather than saves his vast wealth he will

A good measure of the standard of living is

If government saving is negative,then

When the government runs a budget deficit,we would expect to see that

Figure 14-3 -Refer to Figure 14-3.Which of the following is consistent with the graph depicted above?

Purchases of Huggies diapers should

Explain how unemployment changes over the business cycle.Why do these changes occur?

Which of the following would contribute to a sustained high rate of economic growth in the long run in an economy?

The effect of a recession on a company like Boeing Aircraft is such that

How are unemployment,inflation,and the business cycle related?

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.

Financial securities that represent promises to repay a fixed amount of funds are known as

A government budget surplus from reduced government spending (no change in net taxes)will ________ the level of investment in the economy and ________ the level of saving (private plus public)in the economy.

Since the 1950s,

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

A firm can fund an expansion of its operations by

Liquidity refers to

Scenario 14-1 Consider the following data for a closed economy: Y = $12 trillion C = $8 trillion I= $2 trillion G = $2 trillion TR = $2 trillion T = $3 trillion -Refer to Scenario 14-1.Based on the information above,what is the level of public saving?

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

If you invest $10,000 in a bond that earns 8% interest per year,how many years will it take to double your money?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology,production,and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage,international Trade,and Exchange Rates

Filters

A government budget surplus from reduced government spending (no change in net taxes)will the level of investment in the economy and the level of saving (private plus public)in the economy.