Question 1

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

Accepted Answer

A) True 
 B)False  True

Question 2

Table 10-2
  
-Refer to Table 10-2.Using the table above,what is the approximate growth rate of real GDP from 2011 to 2012?

Accepted Answer

A) 1% 
B) 2% 
C) 3% 
D) 4% 
A) 1% 
B) 2% 
C) 3% 
D) 4% D

Question 3

If government purchases are $400 million,taxes are $700 million,and transfers are $200 million,which of the following is true?

Accepted Answer

A) Public saving is $500 million. 
B) The budget deficit is $100 million. 
C) The budget deficit is $500 million. 
D) Public saving is $100 million. 
A) Public saving is $500 million. 
B) The budget deficit is $100 million. 
C) The budget deficit is $500 million. 
D) Public saving is $100 million. D

Question 4

If net taxes rise by $150 billion,would you expect household saving to fall by $150 billion,by more than $150 billion,or by less than $150 billion?

Accepted Answer

Private saving is equal to Y - C - T,so

Question 5

Figure 10-3  
-Refer to Figure 10-3.Which of the following is consistent with the graph depicted above?

Accepted Answer

A) Taxes are changed so that real interest income is taxed rather than nominal interest income. 
B) An expected recession decreases the profitability of new investment. 
C) The government runs a budget deficit. 
D) Technological change increases the profitability of new investment. 
A) Taxes are changed so that real interest income is taxed rather than nominal interest income. 
B) An expected recession decreases the profitability of new investment. 
C) The government runs a budget deficit. 
D) Technological change increases the profitability of new investment.

Question 6

Which of the following does not describe governmental policy actions that are helpful in supporting growth in an economy? Governmental policies that

Accepted Answer

A) avoid playing any role in developing communication systems. 
B) provide secure rights to private property. 
C) establish an independent court system that enforces contracts. 
D) facilitate the development of an efficient financial system. 
A) avoid playing any role in developing communication systems. 
B) provide secure rights to private property. 
C) establish an independent court system that enforces contracts. 
D) facilitate the development of an efficient financial system.

Question 7

The period between a business cycle peak and a business cycle trough is called

Accepted Answer

A) expansion. 
B) recession. 
C) diffusion. 
D) recalculation. 
A) expansion. 
B) recession. 
C) diffusion. 
D) recalculation.

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

Purchases of Huggies diapers should

Accepted Answer

A) remain fairly constant over the business cycle. 
B) increase in recessions and decrease in expansions. 
C) decrease in recessions and increase in expansions. 
D) increase in recessions and remain constant in expansions. 
A) remain fairly constant over the business cycle. 
B) increase in recessions and decrease in expansions. 
C) decrease in recessions and increase in expansions. 
D) increase in recessions and remain constant in expansions.

Question 10

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

Accepted Answer

Technological change is very important f

Question 11

Table 10-1
  
-Refer to Table 10-1.Using the table above,what is the approximate growth rate of real GDP from 2012 to 2013?

Accepted Answer

A) 1% 
B) 2% 
C) 3% 
D) 4% 
A) 1% 
B) 2% 
C) 3% 
D) 4%

Question 12

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 13

If real GDP in a small country in 2012 is $8 billion and real GDP in the same country in 2013 is $8.3 billion,the growth rate of real GDP between 2012 and 2013

Accepted Answer

A) is 3.0%. 
B) is 3.6%. 
C) is 3.75%. 
D) cannot be determined from the information given. 
A) is 3.0%. 
B) is 3.6%. 
C) is 3.75%. 
D) cannot be determined from the information given.

Question 14

Equilibrium in the loanable funds market determines

Accepted Answer

A) the nominal interest rate. 
B) the current interest rate. 
C) the real interest rate. 
D) the expected interest rate. 
A) the nominal interest rate. 
B) the current interest rate. 
C) the real interest rate. 
D) the expected interest rate.

Question 15

An increase in the government budget surplus will shift the ________ curve for loanable funds to the ________ and the equilibrium real interest rate will ________.

Accepted Answer

A) supply; right; fall 
B) supply; left; rise 
C) demand; right; rise 
D) demand; left; fall 
A) supply; right; fall 
B) supply; left; rise 
C) demand; right; rise 
D) demand; left; fall

Question 16

Scenario 10-1

Consider the following data for a closed economy:

Y = $12 trillion
C = $8 trillion
I= $2 trillion
G = $2 trillion
TR = $2 trillion
T = $3 trillion

-Refer to Scenario 10-1.Based on the information above,what is the level of private saving in the economy?

Accepted Answer

A) $3 trillion 
B) $4 trillion 
C) $5 trillion 
D) $8 trillion 
A) $3 trillion 
B) $4 trillion 
C) $5 trillion 
D) $8 trillion

Question 17

In a closed economy,public 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) T - G - TR 
D) Y - C - T + TR 
A) Y - C - T 
B) Y - G - T 
C) T - G - TR 
D) Y - C - T + TR

Question 18

Economist Steve Landsburg has pointed out that Ebenezer Scrooge's change in behavior from miser to spender might actually be detrimental to the economy because

Accepted Answer

A) Scrooge's miserly saving helped contribute to the production of investment goods rather than consumption goods. 
B) Scrooge was happiest when he was saving money,and happiness is the key to economic growth. 
C) saving has to be greater than consumption for the economy to grow. 
D) Scrooge's consumption habits were more detrimental to the environment than were his earlier saving habits. 
A) Scrooge's miserly saving helped contribute to the production of investment goods rather than consumption goods. 
B) Scrooge was happiest when he was saving money,and happiness is the key to economic growth. 
C) saving has to be greater than consumption for the economy to grow. 
D) Scrooge's consumption habits were more detrimental to the environment than were his earlier saving habits.

Question 19

The period of expansion ends with a ________ and the period of recession ends with a ________.

Accepted Answer

A) business cycle peak; business cycle trough 
B) business cycle trough; business cycle peak 
C) business cycle peak; business cycle peak 
D) business cycle trough; business cycle trough 
A) business cycle peak; business cycle trough 
B) business cycle trough; business cycle peak 
C) business cycle peak; business cycle peak 
D) business cycle trough; business cycle trough

Question 20

If taxes are less than transfers plus government spending,then

Accepted Answer

A) there is positive saving. 
B) there is a balanced budget. 
C) there is a budget surplus. 
D) there is public dissaving. 
A) there is positive saving. 
B) there is a balanced budget. 
C) there is a budget surplus. 
D) there is public dissaving.

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 growth rate of real GDP from 2011 to 2012?

If government purchases are $400 million,taxes are $700 million,and transfers are $200 million,which of the following is true?

If net taxes rise by $150 billion,would you expect household saving to fall by $150 billion,by more than $150 billion,or by less than $150 billion?

Figure 10-3 -Refer to Figure 10-3.Which of the following is consistent with the graph depicted above?

Which of the following does not describe governmental policy actions that are helpful in supporting growth in an economy? Governmental policies that

The period between a business cycle peak and a business cycle trough is called

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

Purchases of Huggies diapers should

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

Table 10-1 -Refer to Table 10-1.Using the table above,what is the approximate growth rate of real GDP from 2012 to 2013?

During the expansion phase of the business cycle,

If real GDP in a small country in 2012 is $8 billion and real GDP in the same country in 2013 is $8.3 billion,the growth rate of real GDP between 2012 and 2013

Equilibrium in the loanable funds market determines

An increase in the government budget surplus will shift the curve for loanable funds to the and the equilibrium real interest rate will .

Scenario 10-1 Consider the following data for a closed economy: Y = $12 trillion C = $8 trillion I= $2 trillion G = $2 trillion TR = $2 trillion T = $3 trillion -Refer to Scenario 10-1.Based on the information above,what is the level of private saving in the economy?

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

Economist Steve Landsburg has pointed out that Ebenezer Scrooge's change in behavior from miser to spender might actually be detrimental to the economy because

The period of expansion ends with a and the period of recession ends with a .

If taxes are less than transfers plus government spending,then

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 growth rate of real GDP from 2011 to 2012?

If government purchases are $400 million,taxes are $700 million,and transfers are $200 million,which of the following is true?

If net taxes rise by $150 billion,would you expect household saving to fall by $150 billion,by more than $150 billion,or by less than $150 billion?

Figure 10-3 -Refer to Figure 10-3.Which of the following is consistent with the graph depicted above?

Which of the following does not describe governmental policy actions that are helpful in supporting growth in an economy? Governmental policies that

The period between a business cycle peak and a business cycle trough is called

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

Purchases of Huggies diapers should

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

Table 10-1 -Refer to Table 10-1.Using the table above,what is the approximate growth rate of real GDP from 2012 to 2013?

During the expansion phase of the business cycle,

If real GDP in a small country in 2012 is $8 billion and real GDP in the same country in 2013 is $8.3 billion,the growth rate of real GDP between 2012 and 2013

Equilibrium in the loanable funds market determines

An increase in the government budget surplus will shift the ________ curve for loanable funds to the ________ and the equilibrium real interest rate will ________.

Scenario 10-1 Consider the following data for a closed economy: Y = $12 trillion C = $8 trillion I= $2 trillion G = $2 trillion TR = $2 trillion T = $3 trillion -Refer to Scenario 10-1.Based on the information above,what is the level of private saving in the economy?

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

Economist Steve Landsburg has pointed out that Ebenezer Scrooge's change in behavior from miser to spender might actually be detrimental to the economy because

The period of expansion ends with a ________ and the period of recession ends with a ________.

If taxes are less than transfers plus government spending,then

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

An increase in the government budget surplus will shift the curve for loanable funds to the and the equilibrium real interest rate will .

The period of expansion ends with a and the period of recession ends with a .