Question 1

Economists have not found a way to predict when recessions will begin and end.

Accepted Answer

A) True 
 B)False

Question 2

Table 10-2
  
-Refer to Table 10-2.Using the table above,what is the approximate average annual growth rate from 2013 to 2016?

Accepted Answer

A) -1% 
B) 1% 
C) 2% 
D) 4% 
A) -1% 
B) 1% 
C) 2% 
D) 4%

Question 3

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

Accepted Answer

A) decrease. 
B) increase. 
C) be unchanged. 
D) change in the same direction as the rate of inflation. 
A) decrease. 
B) increase. 
C) be unchanged. 
D) change in the same direction as the rate of inflation.

Question 4

Figure 10-4  
-Refer to Figure 10-4.Which of the following is consistent with the graph depicted?

Accepted Answer

A) an increase in household income 
B) an increase in transfer payments to households 
C) an increase in the proportion of income after net taxes used for consumption 
D) an increase in tax revenues collected by the government 
A) an increase in household income 
B) an increase in transfer payments to households 
C) an increase in the proportion of income after net taxes used for consumption 
D) an increase in tax revenues collected by the government

Question 5

Empirical evidence shows that the impact of government budget deficits and surpluses on the equilibrium interest rate is quite large.

Accepted Answer

A) True 
 B)False

Question 6

Suppose that real GDP for 2015 was $10,000 billion and real GDP for 2016 was $9,500 billion.What is the rate of growth of real GDP between 2015 and 2016?

Accepted Answer

A) -10% 
B) -5% 
C) -2% 
D) -1% 
A) -10% 
B) -5% 
C) -2% 
D) -1%

Question 7

If real GDP per capita doubles between 2005 and 2020,what is the average annual growth rate of real GDP per capita?

Accepted Answer

A) 4.7% 
B) 10.5% 
C) 15% 
D) 21% 
A) 4.7% 
B) 10.5% 
C) 15% 
D) 21%

Question 8

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

Accepted Answer

An increase in household saving increase

Question 9

The best measure of the standard of living is

Accepted Answer

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

Question 10

Carefully define the two categories of saving in the economy.

Accepted Answer

There are two categories of saving in th

Question 11

Between 1950 and 2009,the average length of recessions in the United States was

Accepted Answer

A) 11 months. 
B) two years. 
C) three months. 
D) eighteen months. 
A) 11 months. 
B) two years. 
C) three months. 
D) eighteen months.

Question 12

________ is the ease with which a financial security can be exchanged for money.

Accepted Answer

A) Risk 
B) The face value 
C) Liquidity 
D) The rate of return 
A) Risk 
B) The face value 
C) Liquidity 
D) The rate of return

Question 13

In a closed economy,private saving is equal to which of the following? (Y = GDP,C = Consumption,G = Government purchases,T = Taxes,and TR = Transfers)

Accepted Answer

A) Y - C - T 
B) Y - G - T 
C) Y - G - T + TR 
D) Y + TR - C - T 
A) Y - C - T 
B) Y - G - T 
C) Y - G - T + TR 
D) Y + TR - C - T

Question 14

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 15

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

Question 16

During the expansion phase of the business cycle,

Accepted Answer

A) production increases. 
B) employment decreases. 
C) income decreases. 
D) unemployment increases. 
A) production increases. 
B) employment decreases. 
C) income decreases. 
D) unemployment increases.

Question 17

If net taxes fall by $80 billion,we would expect

Accepted Answer

A) the government deficit to fall by $80 billion. 
B) household saving to rise by $80 billion. 
C) household saving to rise by less than $80 billion. 
D) household saving to fall by more than $80 billion. 
A) the government deficit to fall by $80 billion. 
B) household saving to rise by $80 billion. 
C) household saving to rise by less than $80 billion. 
D) household saving to fall by more than $80 billion.

Question 18

Figure 10-6  
-Refer to Figure 10-6.The market is in equilibrium.If the government budget deficit rises,which of the following would you expect to see?

Accepted Answer

A) The quantity of loanable funds demanded by firms will rise above $120 million. 
B) The quantity of loanable funds demanded by firms will fall below $120 million. 
C) The budget deficit will have no impact on the quantity of loanable funds demanded by firms. 
D) The interest rate will fall below 4 percent. 
A) The quantity of loanable funds demanded by firms will rise above $120 million. 
B) The quantity of loanable funds demanded by firms will fall below $120 million. 
C) The budget deficit will have no impact on the quantity of loanable funds demanded by firms. 
D) The interest rate will fall below 4 percent.

Question 19

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 crowding out of business investment would be represented graphically by

Accepted Answer

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

Question 20

Explain why increasing the government budget deficit can decrease investment spending.

Accepted Answer

Saving must equal investment in the econ

Economists have not found a way to predict when recessions will begin and end.

Table 10-2 -Refer to Table 10-2.Using the table above,what is the approximate average annual growth rate from 2013 to 2016?

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

Figure 10-4 -Refer to Figure 10-4.Which of the following is consistent with the graph depicted?

Empirical evidence shows that the impact of government budget deficits and surpluses on the equilibrium interest rate is quite large.

Suppose that real GDP for 2015 was $10,000 billion and real GDP for 2016 was $9,500 billion.What is the rate of growth of real GDP between 2015 and 2016?

If real GDP per capita doubles between 2005 and 2020,what is the average annual growth rate of real GDP per capita?

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

The best measure of the standard of living is

Carefully define the two categories of saving in the economy.

Between 1950 and 2009,the average length of recessions in the United States was

________ is the ease with which a financial security can be exchanged for money.

In a closed economy,private saving is equal to which of the following? (Y = GDP,C = Consumption,G = Government purchases,T = Taxes,and TR = Transfers)

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?

During the expansion phase of the business cycle,

If net taxes fall by $80 billion,we would expect

Figure 10-6 -Refer to Figure 10-6.The market is in equilibrium.If the government budget deficit rises,which of the following would you expect to see?

Explain why increasing the government budget deficit can decrease investment spending.

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

Economists have not found a way to predict when recessions will begin and end.

Table 10-2 -Refer to Table 10-2.Using the table above,what is the approximate average annual growth rate from 2013 to 2016?

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

Figure 10-4 -Refer to Figure 10-4.Which of the following is consistent with the graph depicted?

Empirical evidence shows that the impact of government budget deficits and surpluses on the equilibrium interest rate is quite large.

Suppose that real GDP for 2015 was $10,000 billion and real GDP for 2016 was $9,500 billion.What is the rate of growth of real GDP between 2015 and 2016?

If real GDP per capita doubles between 2005 and 2020,what is the average annual growth rate of real GDP per capita?

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

The best measure of the standard of living is

Carefully define the two categories of saving in the economy.

Between 1950 and 2009,the average length of recessions in the United States was

________ is the ease with which a financial security can be exchanged for money.

In a closed economy,private saving is equal to which of the following? (Y = GDP,C = Consumption,G = Government purchases,T = Taxes,and TR = Transfers)

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?

During the expansion phase of the business cycle,

If net taxes fall by $80 billion,we would expect

Figure 10-6 -Refer to Figure 10-6.The market is in equilibrium.If the government budget deficit rises,which of the following would you expect to see?

Explain why increasing the government budget deficit can decrease investment spending.

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