Question 1

Potential GDP in Australia:

Accepted Answer

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

Question 2

Refer to Figure 5.1 for the following questions.
Figure 5.1
  
-Refer to Figure 5.1. Beginning at 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%. 
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%. B

Question 3

When is there a federal budget surplus?

Accepted Answer

A) the government spends more than it collects in taxes 
B) the government spends less than it collects in taxes 
C) the government spends the same amount it collects in taxes 
D) taxes are too high 
A) the government spends more than it collects in taxes 
B) the government spends less than it collects in taxes 
C) the government spends the same amount it collects in taxes 
D) taxes are too high B

Question 4

An 'economic contraction' begins with a/an ________ in spending by firms on capital goods and a/an ________ in spending on durable goods by households.

Accepted Answer

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

Question 5

Let Y = total income; C = consumption; G = government purchases; T = taxes; TR = transfer payments. Public saving is defined as:

Accepted Answer

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

Question 6

Explain why the Australian economy has generally been more stable since the 1950s than before that time.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

First, the economy has changed over time

Question 7

What factors determine labour productivity?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The quantity of capital per ho

Question 8

Which of the following statements about the Australian federal budget is true?

Accepted Answer

A) In 2010, the federal budget was in deficit by $54 billion. 
B) In 1996, the federal budget was in deficit by $5 billion. 
C) In 2007, the federal budget was in surplus by $17 billion. 
D) All of these options are correct. 
A) In 2010, the federal budget was in deficit by $54 billion. 
B) In 1996, the federal budget was in deficit by $5 billion. 
C) In 2007, the federal budget was in surplus by $17 billion. 
D) All of these options are correct.

Question 9

The 'long boom' in Australia referred to the general period of strong economic growth that occurred between:

Accepted Answer

A) 1928 and 1931. 
B) the late 1950s to the late 1980s. 
C) the late 1940s to the early 1970s. 
D) 1991 and 2007. 
A) 1928 and 1931. 
B) the late 1950s to the late 1980s. 
C) the late 1940s to the early 1970s. 
D) 1991 and 2007.

Question 10

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 11

If, as economist Alwyn Young has suggested, high economic growth rates in Singapore are not a result of technological progress, how are growth rates in Singapore expected to change over time?

Accepted Answer

A) Without technological progress, the high growth rates cannot be sustained. 
B) As long as the labour force participation rate is rising, growth can still continue, despite a lack of technological progress. 
C) As long as the amount of capital per hour worked continues to expand, the growth rate in Singapore will continue to rise at an increasing rate. 
D) Agricultural workers will continue to expand their productivity, thereby allowing Singapore to achieve growth rates above those of higher-income countries. 
A) Without technological progress, the high growth rates cannot be sustained. 
B) As long as the labour force participation rate is rising, growth can still continue, despite a lack of technological progress. 
C) As long as the amount of capital per hour worked continues to expand, the growth rate in Singapore will continue to rise at an increasing rate. 
D) Agricultural workers will continue to expand their productivity, thereby allowing Singapore to achieve growth rates above those of higher-income countries.

Question 12

What happens when a recession ends?

Accepted Answer

A) Firms increase the amount of borrowing. 
B) Households decrease spending on durable goods. 
C) The household sector decreases spending substantially. 
D) Interest rates decrease. 
A) Firms increase the amount of borrowing. 
B) Households decrease spending on durable goods. 
C) The household sector decreases spending substantially. 
D) Interest rates decrease.

Question 13

Because a company such as Boeing produces expensive durable goods (aircraft), the demand for their goods:

Accepted Answer

A) is likely to increase during recession. 
B) declines when incomes in the economy are rising. 
C) is consistently high, regardless of the state of the economy. 
D) tends to follow the business cycle. 
A) is likely to increase during recession. 
B) declines when incomes in the economy are rising. 
C) is consistently high, regardless of the state of the economy. 
D) tends to follow the business cycle.

Question 14

Outline the trend in real GDP per capita in Australia from 1901 to 2016.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

It has trended upwards, increa

Question 15

Workers in ________ countries have ________ to work with than do workers in low income countries.

Accepted Answer

A) high income; less physical capital 
B) high income; more physical capital 
C) high income; more labour 
D) low income; less labour 
A) high income; less physical capital 
B) high income; more physical capital 
C) high income; more labour 
D) low income; less labour

Question 16

How does the existence of financial intermediaries affect liquidity in the financial market?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

Liquidity is the ease with which a finan

Question 17

Refer to Figure 5.1 for the following questions.
Figure 5.1
  
-Refer to Figure 5.1. An increase in the supply of loanable funds could result in which of the following combinations of the real interest rate and quantity of loanable funds at a new equilibrium?

Accepted Answer

A) The real interest rate is 5%, and the quantity of loanable funds is $150 million. 
B) The real interest rate is 5%, and the quantity of loanable funds is $90 million. 
C) The real interest rate is 3%, and the quantity of loanable funds is $150 million. 
D) The real interest rate is 3%, and the quantity of loanable funds is $90 million. 
A) The real interest rate is 5%, and the quantity of loanable funds is $150 million. 
B) The real interest rate is 5%, and the quantity of loanable funds is $90 million. 
C) The real interest rate is 3%, and the quantity of loanable funds is $150 million. 
D) The real interest rate is 3%, and the quantity of loanable funds is $90 million.

Question 18

The 'rule of 70' states that it takes approximately 70 years for a developing economy to become a developed economy once economic growth begins.

Accepted Answer

A) True 
 B)False

Question 19

Let Y = total income; C = consumption; G = government purchases; T = taxes; TR = transfer payments. Private saving is defined as:

Accepted Answer

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

Question 20

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.

Potential GDP in Australia:

Refer to Figure 5.1 for the following questions. Figure 5.1 -Refer to Figure 5.1. Beginning at equilibrium, if the government budget deficit rises, which of the following would you expect to see?

When is there a federal budget surplus?

An 'economic contraction' begins with a/an in spending by firms on capital goods and a/an in spending on durable goods by households.

Let Y = total income; C = consumption; G = government purchases; T = taxes; TR = transfer payments. Public saving is defined as:

Explain why the Australian economy has generally been more stable since the 1950s than before that time. _ _

What factors determine labour productivity? _ _

Which of the following statements about the Australian federal budget is true?

The 'long boom' in Australia referred to the general period of strong economic growth that occurred between:

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

If, as economist Alwyn Young has suggested, high economic growth rates in Singapore are not a result of technological progress, how are growth rates in Singapore expected to change over time?

What happens when a recession ends?

Because a company such as Boeing produces expensive durable goods (aircraft), the demand for their goods:

Outline the trend in real GDP per capita in Australia from 1901 to 2016. _ _

Workers in countries have to work with than do workers in low income countries.

How does the existence of financial intermediaries affect liquidity in the financial market? _ _

Refer to Figure 5.1 for the following questions. Figure 5.1 -Refer to Figure 5.1. An increase in the supply of loanable funds could result in which of the following combinations of the real interest rate and quantity of loanable funds at a new equilibrium?

The 'rule of 70' states that it takes approximately 70 years for a developing economy to become a developed economy once economic growth begins.

Let Y = total income; C = consumption; G = government purchases; T = taxes; TR = transfer payments. Private saving is defined as:

During the expansion phase of the business cycle:

Economics: Foundations and Models

Choices and Trade Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Gdp: Measuring Total Production, Income and Economic Growth

Long-Run Economic Growth: Sources and Policies

Unemployment

Inflation

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks and the Reserve Bank of Australia

Monetary Policy

Fiscal Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 5: Economic Growth, the Financial System and Business Cycles

Potential GDP in Australia:

Refer to Figure 5.1 for the following questions. Figure 5.1 -Refer to Figure 5.1. Beginning at equilibrium, if the government budget deficit rises, which of the following would you expect to see?

When is there a federal budget surplus?

An 'economic contraction' begins with a/an ________ in spending by firms on capital goods and a/an ________ in spending on durable goods by households.

Let Y = total income; C = consumption; G = government purchases; T = taxes; TR = transfer payments. Public saving is defined as:

Explain why the Australian economy has generally been more stable since the 1950s than before that time. _____________________________________________________________________________________________ _____________________________________________________________________________________________

What factors determine labour productivity? _____________________________________________________________________________________________ _____________________________________________________________________________________________

Which of the following statements about the Australian federal budget is true?

The 'long boom' in Australia referred to the general period of strong economic growth that occurred between:

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

If, as economist Alwyn Young has suggested, high economic growth rates in Singapore are not a result of technological progress, how are growth rates in Singapore expected to change over time?

What happens when a recession ends?

Because a company such as Boeing produces expensive durable goods (aircraft), the demand for their goods:

Outline the trend in real GDP per capita in Australia from 1901 to 2016. _____________________________________________________________________________________________ _____________________________________________________________________________________________

Workers in ________ countries have ________ to work with than do workers in low income countries.

How does the existence of financial intermediaries affect liquidity in the financial market? _____________________________________________________________________________________________ _____________________________________________________________________________________________

Refer to Figure 5.1 for the following questions. Figure 5.1 -Refer to Figure 5.1. An increase in the supply of loanable funds could result in which of the following combinations of the real interest rate and quantity of loanable funds at a new equilibrium?

The 'rule of 70' states that it takes approximately 70 years for a developing economy to become a developed economy once economic growth begins.

Let Y = total income; C = consumption; G = government purchases; T = taxes; TR = transfer payments. Private saving is defined as:

During the expansion phase of the business cycle:

Economics: Foundations and Models

Choices and Trade Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Gdp: Measuring Total Production, Income and Economic Growth

Long-Run Economic Growth: Sources and Policies

Unemployment

Inflation

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks and the Reserve Bank of Australia

Monetary Policy

Fiscal Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

An 'economic contraction' begins with a/an in spending by firms on capital goods and a/an in spending on durable goods by households.

Explain why the Australian economy has generally been more stable since the 1950s than before that time. _ _

What factors determine labour productivity? _ _

Outline the trend in real GDP per capita in Australia from 1901 to 2016. _ _

Workers in countries have to work with than do workers in low income countries.

How does the existence of financial intermediaries affect liquidity in the financial market? _ _