Question 1

The budget deficit is defined as

Accepted Answer

A) T - (G + TR),and this is negative. 
B) T - (G + TR),and this is positive. 
C) T + (G - TR),and this is negative. 
D) T + (G + TR),and this is negative. 
A) T - (G + TR),and this is negative. 
B) T - (G + TR),and this is positive. 
C) T + (G - TR),and this is negative. 
D) T + (G + TR),and this is negative.

Question 2

Table 10-2
  
-Refer to Table 10-2.Using the table above,what is the approximate growth rate of real GDP from 2015 to 2016?

Accepted Answer

A) -2% 
B) -1% 
C) 1% 
D) 2% 
A) -2% 
B) -1% 
C) 1% 
D) 2%

Question 3

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 4

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 5

Explain why a centrally-planned economy might not grow as rapidly as a market economy.

Accepted Answer

Technological change is very important f

Question 6

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

Accepted Answer

A) an increase in the federal government surplus 
B) an increase in the budget deficit 
C) an increase in consumer dissavings 
D) an increase in transfer payments 
A) an increase in the federal government surplus 
B) an increase in the budget deficit 
C) an increase in consumer dissavings 
D) an increase in transfer payments

Question 7

Explain what happens to inflation during the business cycle.Give an intuitive explanation as to why inflation changes the way it does over the business cycle.

Accepted Answer

Inflation will rise during an expansion

Question 8

During the expansion phase of the business cycle,which of the following eventually increases?

Accepted Answer

A) production 
B) employment 
C) income 
D) all of the above 
A) production 
B) employment 
C) income 
D) all of the above

Question 9

What is one difference between stocks and bonds?

Accepted Answer

A) Bonds earn a higher rate of return than stocks. 
B) Stocks earn a higher rate of return than bonds. 
C) Bonds are purchased at a bank,while stocks are purchased through the federal government. 
D) Stocks represent partial ownership in a firm,while bonds do not. 
A) Bonds earn a higher rate of return than stocks. 
B) Stocks earn a higher rate of return than bonds. 
C) Bonds are purchased at a bank,while stocks are purchased through the federal government. 
D) Stocks represent partial ownership in a firm,while bonds do not.

Question 10

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

Accepted Answer

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

Question 11

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

Accepted Answer

A recessionary phase of a business cycle

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

The demand for loanable funds is downward sloping because the ________ the interest rate,the ________ the number of profitable investment projects a firm can undertake,and the ________ the quantity demanded of loanable funds.

Accepted Answer

A) lower;greater;greater 
B) lower;smaller;greater 
C) greater;greater;greater 
D) greater;smaller;greater 
A) lower;greater;greater 
B) lower;smaller;greater 
C) greater;greater;greater 
D) greater;smaller;greater

Question 14

In a closed economy,which of the following components of GDP is not included?

Accepted Answer

A) investment 
B) government spending 
C) net exports 
D) consumption 
A) investment 
B) government spending 
C) net exports 
D) consumption

Question 15

For the recessions in the United States since the 1950s,

Accepted Answer

A) cyclical unemployment has been non-existent. 
B) unemployment rises on average by about 1.2 percentage points during the 12 months after a recession begins. 
C) unemployment falls on average by 2 percentage points during the 12 months after a recession begins. 
D) unemployment rises on average about 5 percentage points during the 12 months after a recession begins. 
A) cyclical unemployment has been non-existent. 
B) unemployment rises on average by about 1.2 percentage points during the 12 months after a recession begins. 
C) unemployment falls on average by 2 percentage points during the 12 months after a recession begins. 
D) unemployment rises on average about 5 percentage points during the 12 months after a recession begins.

Question 16

During the recession phase of the business cycle,

Accepted Answer

A) production is usually rising. 
B) interest rates are usually falling. 
C) unemployment is usually falling. 
D) income is usually rising. 
A) production is usually rising. 
B) interest rates are usually falling. 
C) unemployment is usually falling. 
D) income is usually rising.

Question 17

Figure 10-1  
-Refer to Figure 10-1.Which of the following is consistent with the graph depicted above?

Accepted Answer

A) An expected recession decreases the profitability of new investment. 
B) Technological change increases the profitability of new investment. 
C) The government runs a budget surplus. 
D) Households become spendthrifts and begin to save less. 
A) An expected recession decreases the profitability of new investment. 
B) Technological change increases the profitability of new investment. 
C) The government runs a budget surplus. 
D) Households become spendthrifts and begin to save less.

Question 18

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

Accepted Answer

A) a shift in the supply curve for loanable funds to the right. 
B) a shift in the supply curve for loanable funds to the left. 
C) a movement to the right along the supply curve for loanable funds. 
D) a movement to the left along the supply curve for loanable funds. 
A) a shift in the supply curve for loanable funds to the right. 
B) a shift in the supply curve for loanable funds to the left. 
C) a movement to the right along the supply curve for loanable funds. 
D) a movement to the left along the supply curve for loanable funds.

Question 19

Which of the following will result in an increase in labor productivity?

Accepted Answer

A) a decrease in the number of people attending institutions of higher education 
B) a decline in the amount of human capital per worker 
C) an increase in technology 
D) a decline in the capital stock per hour worked 
A) a decrease in the number of people attending institutions of higher education 
B) a decline in the amount of human capital per worker 
C) an increase in technology 
D) a decline in the capital stock per hour worked

Question 20

The federal budget deficit can be reduced by

Accepted Answer

A) raising taxes. 
B) raising government spending. 
C) raising transfer payments. 
D) higher interest rates. 
A) raising taxes. 
B) raising government spending. 
C) raising transfer payments. 
D) higher interest rates.

The budget deficit is defined as

Table 10-2 -Refer to Table 10-2.Using the table above,what is the approximate growth rate of real GDP from 2015 to 2016?

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

A good measure of the standard of living is

Explain why a centrally-planned economy might not grow as rapidly as a market economy.

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

Explain what happens to inflation during the business cycle.Give an intuitive explanation as to why inflation changes the way it does over the business cycle.

During the expansion phase of the business cycle,which of the following eventually increases?

What is one difference between stocks and bonds?

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

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

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

The demand for loanable funds is downward sloping because the the interest rate,the the number of profitable investment projects a firm can undertake,and the the quantity demanded of loanable funds.

In a closed economy,which of the following components of GDP is not included?

For the recessions in the United States since the 1950s,

During the recession phase of the business cycle,

Figure 10-1 -Refer to Figure 10-1.Which of the following is consistent with the graph depicted above?

Which of the following will result in an increase in labor productivity?

The federal budget deficit can be reduced by

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

The budget deficit is defined as

Table 10-2 -Refer to Table 10-2.Using the table above,what is the approximate growth rate of real GDP from 2015 to 2016?

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

A good measure of the standard of living is

Explain why a centrally-planned economy might not grow as rapidly as a market economy.

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

Explain what happens to inflation during the business cycle.Give an intuitive explanation as to why inflation changes the way it does over the business cycle.

During the expansion phase of the business cycle,which of the following eventually increases?

What is one difference between stocks and bonds?

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

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

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

The demand for loanable funds is downward sloping because the ________ the interest rate,the ________ the number of profitable investment projects a firm can undertake,and the ________ the quantity demanded of loanable funds.

In a closed economy,which of the following components of GDP is not included?

For the recessions in the United States since the 1950s,

During the recession phase of the business cycle,

Figure 10-1 -Refer to Figure 10-1.Which of the following is consistent with the graph depicted above?

Which of the following will result in an increase in labor productivity?

The federal budget deficit can be reduced by

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

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

The demand for loanable funds is downward sloping because the the interest rate,the the number of profitable investment projects a firm can undertake,and the the quantity demanded of loanable funds.