Question 1

Table 14-2
 $$\begin{array} { | c | c | } 
\hline \text { Year } & \begin{array} { c } 
\text { Real GDP (billions } \
\text { of 2000 dollars) }
\end{array} \
\hline 2010 & \$ 10,100 \
\hline 2011 & 10,950 \
\hline 2012 & 11,425 \
\hline 2013 & 11,300 \
\hline
\end{array}$$
-Refer to Table 14-2.Using the table above,what is the approximate growth rate of real GDP from 2012 to 2013?

Accepted Answer

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

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

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

The answer of How have government policies and programs affected...

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Figure 14-6
 
-Refer to Figure 14-6.The loanable funds market is given in the figure above.If the current real interest rate is 5 percent,which of the following is true?

Accepted Answer

A) The loanable funds market is in equilibrium. 
B) There is a surplus of loanable funds in the market. 
C) There is a shortage of loanable funds in the market. 
D) The quantity of loanable funds being demanded in the market is less than $90 million.

Question 6

How has economist Robert Fogel explained that economic growth is connected to life expectancy? Based on this connection,in what country would you expect to have a longer life expectancy,the United States or India? Explain.

Accepted Answer

The answer of How has economist Robert Fogel explained that...

Question 7

What is "human capital," and how does human capital affect labor productivity and economic growth?

Accepted Answer

The answer of What is "human capital," and how does...

Question 8

If labor productivity growth slows down in a country,this will

Accepted Answer

A) accelerate the increase in real GDP per capita. 
B) accelerate the increase in nominal GDP. 
C) slow down the increase in real GDP per capita. 
D) slow down the increase in nominal GDP.

Question 9

The Business Cycle Dating Committee,a part of the ________,officially decides when a recession begins and ends.

Accepted Answer

A) federal government 
B) Bureau of Labor Statistics 
C) National Bureau of Economic Research 
D) Federal Reserve

Question 10

Which of the following explains why fluctuations in real GDP have become less volatile in the United States since 1950?

Accepted Answer

A) Services have become a smaller fraction of GDP since the 1950s. 
B) Unemployment insurance and other government transfer programs are more prevalent since the 1950s. 
C) The government has become more reluctant to intervene when real GDP declines and unemployment rises since the 1950s. 
D) both B and C

Question 11

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.

Question 12

The demand for loanable funds has a ________ slope because the lower the interest rate,the ________ number of investment projects are profitable,and the ________ the quantity of loanable funds demanded.

Accepted Answer

A) negative; greater; greater 
B) negative; greater; lesser 
C) negative; lesser; greater 
D) positive; lesser; lesser

Question 13

In an open economy,the relationship between GDP (Y)and expenditures is Y = C + I + G.

Accepted Answer

A) True 
 B)False

Question 14

How would the equilibrium quantity of loanable funds respond to a change from an income tax to a consumption tax?

Accepted Answer

A) The equilibrium quantity of loanable funds would rise. 
B) The equilibrium quantity of loanable funds would fall. 
C) The equilibrium quantity of loanable funds would be unaffected. 
D) The equilibrium quantity of loanable funds may rise or fall based on whether household saving increases or decreases as a result of the change from an income tax to a consumption tax.

Question 15

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

Question 16

Inflation is measured

Accepted Answer

A) using the level of the consumer price index. 
B) as the percentage change in the consumer price index. 
C) using the level of real GDP. 
D) as the percentage change in real GDP.

Question 17

An increase in the real interest rate does which of the following?

Accepted Answer

A) reduces the demand for loanable funds 
B) reduces saving 
C) reduces consumption spending 
D) increases the demand for loanable funds

Question 18

Which of the following would encourage economic growth through increases in the capital stock?

Accepted Answer

A) a change from an income tax to a consumption tax 
B) an increase in household saving 
C) a decrease in the government deficit 
D) all of the above

Question 19

If GDP is currently $13 trillion and is growing at a rate of 2.3% per year,how long will it take GDP to reach $26 trillion?

Accepted Answer

A) about 15 years 
B) about 17 years 
C) about 25 years 
D) about 30 years

Question 20

Table 14-2
 $$\begin{array} { | c | c | } 
\hline \text { Year } & \begin{array} { c } 
\text { Real GDP (billions } \
\text { of 2000 dollars) }
\end{array} \
\hline 2010 & \$ 10,100 \
\hline 2011 & 10,950 \
\hline 2012 & 11,425 \
\hline 2013 & 11,300 \
\hline
\end{array}$$
-Refer to Table 14-2.Using the table above,what is the approximate average annual growth rate from 2010 to 2013?

Accepted Answer

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

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

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

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.

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

Figure 14-6 -Refer to Figure 14-6.The loanable funds market is given in the figure above.If the current real interest rate is 5 percent,which of the following is true?

How has economist Robert Fogel explained that economic growth is connected to life expectancy? Based on this connection,in what country would you expect to have a longer life expectancy,the United States or India? Explain.

What is "human capital," and how does human capital affect labor productivity and economic growth?

If labor productivity growth slows down in a country,this will

The Business Cycle Dating Committee,a part of the ________,officially decides when a recession begins and ends.

Which of the following explains why fluctuations in real GDP have become less volatile in the United States since 1950?

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

The demand for loanable funds has a slope because the lower the interest rate,the number of investment projects are profitable,and the the quantity of loanable funds demanded.

In an open economy,the relationship between GDP (Y)and expenditures is Y = C + I + G.

How would the equilibrium quantity of loanable funds respond to a change from an income tax to a consumption tax?

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

Inflation is measured

An increase in the real interest rate does which of the following?

Which of the following would encourage economic growth through increases in the capital stock?

If GDP is currently $13 trillion and is growing at a rate of 2.3% per year,how long will it take GDP to reach $26 trillion?