Question 1

Which of the following is an example of human capital?

Accepted Answer

A) a computer 
B) a factory building 
C) a college education 
D) a software program

Question 2

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 3

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

Accepted Answer

A) decreased household saving 
B) decreased government saving 
C) a shift to the left of the supply curve for loanable funds 
D) all of the above

Question 4

In a closed economy,what is the relationship between saving and investment?

Accepted Answer

A) Saving is greater than investment. 
B) Investment is greater than saving. 
C) Investment is equal to saving. 
D) Investment may be greater or smaller than saving.

Question 5

Explain and show graphically how government deficits can "crowd out" private investment.

Accepted Answer

The answer of Explain and show graphically how government deficits...

Question 6

If,between 2006 and 2016,the economy's real GDP grew from $20 billion to $40 billion,what was the average annual growth rate in the economy?

Accepted Answer

A) 3% 
B) 7% 
C) 20% 
D) 100%

Question 7

If the CPI is currently 202,what does this tell you about inflation between last year and this year?

Accepted Answer

A) There was deflation in the economy between this year and last year. 
B) Inflation in the economy between this year and last year was 2%. 
C) Inflation in the economy between this year and last year was 102%. 
D) The CPI measures only the level of prices in a given year,not the percentage change in prices from one year to the next.

Question 8

An increase in government purchases,ceteris paribus,will

Accepted Answer

A) increase public saving. 
B) increase the supply of loanable funds. 
C) reduce investment. 
D) reduce real GDP.

Question 9

If labor productivity growth slows down in a country,this means that the growth rate in ________ has declined.

Accepted Answer

A) labor force participation 
B) the quantity of goods or services that can be produced by one hour of work 
C) the working-age population 
D) nominal GDP

Question 10

Refer to the Article Summary.Labor productivity in the UK was well below the productivity in five of the other G7 nations,only faring better than Japan..Labor productivity is important for an economy because an increase in labor productivity

Accepted Answer

A) will increase the labor force participation rate. 
B) allows the average consumer to increase consumption. 
C) will create short-run,but not long-run,economic growth. 
D) will increase output and decrease wages in the long run.

Question 11

Most economists believe that the return of ________ during the 2007-2009 recession is a key reason why the recession was so severe.

Accepted Answer

A) high tariffs 
B) financial instability 
C) rapid inflation 
D) high interest rates

Question 12

Potential GDP is the maximum output a firm is capable of producing.

Accepted Answer

A) True 
 B)False

Question 13

What factors increase potential GDP? Include a definition of potential GDP in your answer.

Accepted Answer

The answer of What factors increase potential GDP? Include a...

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