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

If,in an economy experiencing inflation,the government decided to tax real interest income rather than nominal interest income,this change would cause the real interest rate to ________ and the equilibrium quantity of loanable funds to ________.

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.

Potential GDP refers to

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

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

The demand for durable goods

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

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

Which of the following will increase investment spending in the economy,holding everything else constant?

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

Which of the following will not occur as the result of a decrease in net taxes?

Inflation tends to ________ during the expansion phase of the business cycle and ________ during the recession phase of the business cycle.

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

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

The NBER's Business Cycle Dating Committee defines a recession as at least two consecutive quarters of falling real GDP.

What two factors are the keys to determining labor productivity?

The total amount of physical capital available in a country is know as the country's

Which of the following is a correct statement?

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

Growth in potential GDP in the United States is estimated to be about