Question 1

An increase in the real interest rate will decrease consumption and investment.

Accepted Answer

A) True 
 B)False

Question 2

________ are financial securities that represent promises to repay a fixed amount of funds.

Accepted Answer

A) Stocks 
B) Bonds 
C) Interest rates 
D) Mutual funds 
A) Stocks 
B) Bonds 
C) Interest rates 
D) Mutual funds

Question 3

Explain why the demand curve for loanable funds has a negative slope.

Accepted Answer

The demand for loanable funds reflects t

Question 4

Because ________ in the government budget deficit increase the real interest rate,budget deficits can ________ firm investment.

Accepted Answer

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

Question 5

Increasing the amount of consumption spending and reducing the amount of savings ________ investment expenditures,and ________ long-run economic growth in the economy.

Accepted Answer

A) increases;increases 
B) increases;decreases 
C) decreases;increases 
D) decreases;decreases 
A) increases;increases 
B) increases;decreases 
C) decreases;increases 
D) decreases;decreases

Question 6

The effect of a recession on a company like Whirlpool Corporation is such that

Accepted Answer

A) sales decline more sharply for Whirlpool 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 Whirlpool 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 7

If the growth rate of real GDP rises from 3% to 4% per year,then the number of years required to double real GDP will decrease from

Accepted Answer

A) 23.3 years to 17.5 years. 
B) 28.0 years to 21.0 years. 
C) 11.2 years to 10.8 years. 
D) 23.3 years to 20.6 years. 
A) 23.3 years to 17.5 years. 
B) 28.0 years to 21.0 years. 
C) 11.2 years to 10.8 years. 
D) 23.3 years to 20.6 years.

Question 8

If technological change increases the profitability of new investments for firms,then the ________ curve for loanable funds will shift to the ________.

Accepted Answer

A) supply;right 
B) supply;left 
C) demand;right 
D) demand;left 
A) supply;right 
B) supply;left 
C) demand;right 
D) demand;left

Question 9

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

Accepted Answer

One determinant of the amount of househo

Question 10

Potential GDP in the United States

Accepted Answer

A) does not change over time. 
B) grows as the economy grows. 
C) changes over a given business cycle. 
D) declines over time. 
A) does not change over time. 
B) grows as the economy grows. 
C) changes over a given business cycle. 
D) declines over time.

Question 11

If GDP grows at a rate of 3% per year,approximately how long will it take for GDP to double in size?

Accepted Answer

A) 12 years 
B) 21 years 
C) 23 years 
D) 35 years 
A) 12 years 
B) 21 years 
C) 23 years 
D) 35 years

Question 12

Typically,as an economy begins to emerge from a recessionary phase of the business cycle,

Accepted Answer

A) unemployment falls immediately. 
B) unemployment continues to rise. 
C) inflation begins to fall. 
D) investment begins to fall. 
A) unemployment falls immediately. 
B) unemployment continues to rise. 
C) inflation begins to fall. 
D) investment begins to fall.

Question 13

A country with no trade and no borrowing and lending relationships with other countries is known as a(n)

Accepted Answer

A) planned economy. 
B) market economy. 
C) open economy. 
D) closed economy. 
A) planned economy. 
B) market economy. 
C) open economy. 
D) closed economy.

Question 14

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 worked 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 worked 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 15

According to the "Rule of 70," it will take 4 years for real GDP per capita to double when the growth rate of real GDP per capita is

Accepted Answer

A) 4 percent. 
B) 12.25 percent. 
C) 17.5 percent. 
D) 28 percent. 
A) 4 percent. 
B) 12.25 percent. 
C) 17.5 percent. 
D) 28 percent.

Question 16

Which of the following is a true statement about the length of recessions and expansions in the United States economy?

Accepted Answer

A) Prior to 1900,the length of expansions equaled the length of recessions. 
B) Prior to 1900,the length of expansions were much less than the length of recessions. 
C) Prior to 1900,the length of expansions were much longer than the length of recessions. 
D) Prior to 1900,the length of recessions were brief and almost nonexistent. 
A) Prior to 1900,the length of expansions equaled the length of recessions. 
B) Prior to 1900,the length of expansions were much less than the length of recessions. 
C) Prior to 1900,the length of expansions were much longer than the length of recessions. 
D) Prior to 1900,the length of recessions were brief and almost nonexistent.

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

An increase in potential GDP is a result

Question 19

Outline the various actions the government sector could take to promote growth.

Accepted Answer

The government should secure private pro

Question 20

The demand for durable goods

Accepted Answer

A) has decreased over time. 
B) declines by a greater percentage than does GDP during a recession. 
C) declines by a smaller percentage than does GDP during a recession. 
D) rises by a greater percentage than does GDP during a recession. 
A) has decreased over time. 
B) declines by a greater percentage than does GDP during a recession. 
C) declines by a smaller percentage than does GDP during a recession. 
D) rises by a greater percentage than does GDP during a recession.

An increase in the real interest rate will decrease consumption and investment.

________ are financial securities that represent promises to repay a fixed amount of funds.

Explain why the demand curve for loanable funds has a negative slope.

Because in the government budget deficit increase the real interest rate,budget deficits can firm investment.

Increasing the amount of consumption spending and reducing the amount of savings investment expenditures,and long-run economic growth in the economy.

The effect of a recession on a company like Whirlpool Corporation is such that

If the growth rate of real GDP rises from 3% to 4% per year,then the number of years required to double real GDP will decrease from

If technological change increases the profitability of new investments for firms,then the curve for loanable funds will shift to the .

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

Potential GDP in the United States

If GDP grows at a rate of 3% per year,approximately how long will it take for GDP to double in size?

Typically,as an economy begins to emerge from a recessionary phase of the business cycle,

A country with no trade and no borrowing and lending relationships with other countries is known as a(n)

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

According to the "Rule of 70," it will take 4 years for real GDP per capita to double when the growth rate of real GDP per capita is

Which of the following is a true statement about the length of recessions and expansions in the United States economy?

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

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

Outline the various actions the government sector could take to promote growth.

The demand for durable goods

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

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

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

Exam 10: Economic Growth, the Financial System, and Business Cycles

An increase in the real interest rate will decrease consumption and investment.

________ are financial securities that represent promises to repay a fixed amount of funds.

Explain why the demand curve for loanable funds has a negative slope.

Because ________ in the government budget deficit increase the real interest rate,budget deficits can ________ firm investment.

Increasing the amount of consumption spending and reducing the amount of savings ________ investment expenditures,and ________ long-run economic growth in the economy.

The effect of a recession on a company like Whirlpool Corporation is such that

If the growth rate of real GDP rises from 3% to 4% per year,then the number of years required to double real GDP will decrease from

If technological change increases the profitability of new investments for firms,then the ________ curve for loanable funds will shift to the ________.

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

Potential GDP in the United States

If GDP grows at a rate of 3% per year,approximately how long will it take for GDP to double in size?

Typically,as an economy begins to emerge from a recessionary phase of the business cycle,

A country with no trade and no borrowing and lending relationships with other countries is known as a(n)

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

According to the "Rule of 70," it will take 4 years for real GDP per capita to double when the growth rate of real GDP per capita is

Which of the following is a true statement about the length of recessions and expansions in the United States economy?

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

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

Outline the various actions the government sector could take to promote growth.

The demand for durable goods

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

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

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

Because in the government budget deficit increase the real interest rate,budget deficits can firm investment.

Increasing the amount of consumption spending and reducing the amount of savings investment expenditures,and long-run economic growth in the economy.

If technological change increases the profitability of new investments for firms,then the curve for loanable funds will shift to the .