Question 1

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.E) B) and C)
F) A) and B)

Question 2

In a closed economy

Accepted Answer

A)   I = Y - C - G.
B)   I = Y + C - G.
C)   I = Y - C + G.
D)   I = Y + C + G.E) A) and D)
F) A) and C)

Question 3

Explain and show graphically how an increase in government spending affects the equilibrium interest rate in the market for loanable funds.

Accepted Answer

When government spending increases, gove...

Question 4

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.E) A) and B)
F) All of the above

Question 5

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

Accepted Answer

Technological change is very important f...

Question 6

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.E) A) and B)
F) B) and D)

Question 7

India's rapid growth can be explained by

Accepted Answer

A)   reduced regulations and market-based reforms.
B)   investment in human capital from 1947 through 2017.
C)   the movement of workers from the agricultural sector to the manufacturing sector.
D)   an increase in labor force participation.E) None of the above
F) A) and B)

Question 8

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 troughE) B) and C)
F) A) and D)

Question 9

Potential GDP in the United States

Accepted Answer

A)   does not change over time.
B)   grows as the economy grows.
C)   changes over a given business cycle.
D)   declines over time.E) A) and D)
F) A) and B)

Question 10

Which of the following goods would see the largest decline in demand during a recession?

Accepted Answer

A)   automobiles
B)   food
C)   clothing
D)   haircutsE) A) and C)
F) B) and C)

Question 11

The Congressional Budget Office reported that federal budget deficits in the United States were likely to increase during the next decade, and due to these higher deficits, "the nation's capital stock ultimately would be smaller, and productivity and income would be lower than would be the case if the debt was smaller." This higher budget deficit could crowd out business investment if it resulted in an increase in interest rates. Crowding out of business investment would be represented graphically by a

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.E) All of the above
F) None of the above

Question 12

An increase in the demand for loanable funds will occur if there is

Accepted Answer

A)   an increase in the real interest rate.
B)   a decrease in the real interest rate.
C)   an increase in expected profits from firm investment projects.
D)   an increase in the nominal interest rate accompanied by an equal increase in inflation.E) B) and C)
F) A) and B)

Question 13

Which of the following is a correct statement?

Accepted Answer

A)   Inflation is measured as the percentage change in the CPI.
B)   The CPI is a widely used measure of the inflation rate.
C)   Real GDP is our best measure of economic growth.
D)   The PPI measures inflation as experienced by producers.E) None of the above
F) B) and C)

Question 14

Define the two categories of saving in the economy.

Accepted Answer

There are two categories of saving in th...

Question 15

What is the name of the organization that defines business cycle peaks and troughs in the United States?

Accepted Answer

A)   the Bureau of Labor Statistics
B)   the Federal Reserve
C)   the National Bureau of Economic Research
D)   the National Peak and Trough CommitteeE) B) and C)
F) A) and D)

Question 16

What is human capital?

Accepted Answer

A)   a slang term for the underground labor market
B)   manufactured goods that are used to produce other goods
C)   accumulated knowledge and skills acquired by a worker
D)   the manager or owner of a businessE) A) and D)
F) C) and D)

Question 17

Article Summary
According to the  U.S. Department of Labor, nonfarm labor productivity rose at an annualized rate of 0.9 percent in the second quarter of 2017 as hours worked and output per worker both rose at their fastest pace in 18 months.  Compared to the same quarter in 2016, productivity increased at a rate of 1.2 percent, its best performance in two years., while unit labor costs fell at a rate of 0.2 percent. From 2007 to 2016, labor productivity increased at an average annual rate of 1.2 percent, well below its long-term growth rate of 2.1 percent from 1947 to 2016.  This is an indication of a decline in the potential growth rate, blamed in part on a shortage of workers and low capital expenditure.

-Refer to the Article Summary. A slowdown in the growth rate of labor productivity, as occurred from 2007-2016, will likely result in

Accepted Answer

A)   an increase in real wages and an increase in the inflation rate.
B)   a decrease in nominal wages and an increase in the inflation rate.
C)   an increase in the country's potential growth rate.
D)   a decline in the country's potential growth rate.E) A) and C)
F) A) and D)

Question 18

What two factors are the keys to determining labor productivity?

Accepted Answer

A)   the business cycle and the growth rate of real GDP
B)   the growth rate of real GDP and the interest rate
C)   the level of technology and the quantity of capital per hour worked
D)   the average level of education of the workforce and the price levelE) A) and B)
F) All of the above

Question 19

Suppose that real GDP for 2017 was $10,000 billion and real GDP for 2018 was $11,000 billion. What is the rate of growth of real GDP between 2017 and 2018?

Accepted Answer

A)   1%
B)   2%
C)   5%
D)   10%E) None of the above
F) A) and C)

Question 20

Which of the following will increase the real interest rate?

Accepted Answer

A)   an increase in the supply of loanable funds
B)   an increase in household saving
C)   an increase in the demand for loanable funds
D)   an increase in the budget surplusE) B) and D)
F) None of the above

Exam 21: Economic Growth, the Financial System, and Business Cycles

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

Correct Answer
verified

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

Correct Answer
verified

Which of the following goods would see the largest decline in demand during a recession?

Correct Answer
verified

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

Correct Answer
verified

The best measure of the standard of living is

Correct Answer
verified

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

Correct Answer
verified
Technological change is very important f...
View Answer

Which of the following will increase the real interest rate?

Correct Answer
verified

What is human capital?

Correct Answer
verified

Potential GDP in the United States

Correct Answer
verified

India's rapid growth can be explained by

Correct Answer
verified

In a closed economy

Correct Answer
verified

Explain and show graphically how an increase in government spending affects the equilibrium interest rate in the market for loanable funds.

Correct Answer
verified
When government spending increases, gove...
View Answer

Correct Answer
verified

An increase in the demand for loanable funds will occur if there is

Correct Answer
verified

Correct Answer
verified

What is the name of the organization that defines business cycle peaks and troughs in the United States?

Correct Answer
verified

Define the two categories of saving in the economy.

Correct Answer
verified
There are two categories of saving in th...
View Answer

What two factors are the keys to determining labor productivity?

Correct Answer
verified

Suppose that real GDP for 2017 was $10,000 billion and real GDP for 2018 was $11,000 billion. What is the rate of growth of real GDP between 2017 and 2018?

Correct Answer
verified

Which of the following is a correct statement?

Correct Answer
verified

Exam 21: Economic Growth, the Financial System, and Business Cycles

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following goods would see the largest decline in demand during a recession?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The best measure of the standard of living is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedTechnological change is very important f...View AnswerShow Answer

Which of the following will increase the real interest rate?

Correct AnswerverifiedShow Answer

What is human capital?

Correct AnswerverifiedShow Answer

Potential GDP in the United States

Correct AnswerverifiedShow Answer

India's rapid growth can be explained by

Correct AnswerverifiedShow Answer

In a closed economy

Correct AnswerverifiedShow Answer

Explain and show graphically how an increase in government spending affects the equilibrium interest rate in the market for loanable funds.

Correct AnswerverifiedWhen government spending increases, gove...View AnswerShow Answer

Correct AnswerverifiedShow Answer

An increase in the demand for loanable funds will occur if there is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

What is the name of the organization that defines business cycle peaks and troughs in the United States?

Correct AnswerverifiedShow Answer

Define the two categories of saving in the economy.

Correct AnswerverifiedThere are two categories of saving in th...View AnswerShow Answer

What two factors are the keys to determining labor productivity?

Correct AnswerverifiedShow Answer

Suppose that real GDP for 2017 was $10,000 billion and real GDP for 2018 was $11,000 billion. What is the rate of growth of real GDP between 2017 and 2018?

Correct AnswerverifiedShow Answer

Which of the following is a correct statement?

Correct AnswerverifiedShow Answer

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Technological change is very important f...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
When government spending increases, gove...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
There are two categories of saving in th...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified