Question 1

Given the following economic data,what is the value of investment in a closed economy?
Y = $10 trillion
C = $5 trillion
TR = $2 trillion
G = $2 trillion

Accepted Answer

A)   $2 trillion
B)   $3 trillion
C)   $5 trillion
D)   cannot be determined without information on taxes (T)

Question 2

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.

Question 3

Retained earnings are always sufficient to finance a firm's rapid expansion in a high-growth economy.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following would increase public saving?

Accepted Answer

A)   an increase in taxes
B)   an increase in transfers
C)   an increase in government purchases
D)   All of the above would increase public saving.

Question 5

During a recession,spending on ________ tends to fall more dramatically than spending on ________.

Accepted Answer

A)   necessities; luxuries
B)   durable goods; nondurable goods
C)   nondurable goods; durable goods
D)   food; cars

Question 6

One difference between stocks and bonds is that

Accepted Answer

A)   stocks are financial securities, while bonds are labor market securities.
B)   stocks are usually issued in electronic form, while bonds are usually issued in paper form.
C)   stocks represent ownership in companies, while bonds represent ownership in banks.
D)   stocks do not involve a promise to repay a purchaser of the stock, while bonds represent a promise to repay the purchase price of the bond.

Question 7

For the recessions in the United States since the 1950s

Accepted Answer

A)   cyclical unemployment has been nonexistent.
B)   unemployment rises on average by about 1.2 percentage points during the 12 months after a recession begins.
C)   unemployment falls on average by 2 percentage points during the 12 months after a recession begins.
D)   unemployment rises on average about 5 percentage points during the 12 months after a recession begins.

Question 8

From 1950 - 2007,recessions in the United States

Accepted Answer

A)   did not occur.
B)   became more severe than before 1950.
C)   became less severe than before 1950.
D)   were about as severe as they were before 1950.

Question 9

Long-run economic growth requires all of the following except

Accepted Answer

A)   technological change.
B)   increases in capital per hour worked.
C)   government provision of secure property rights.
D)   political instability.

Question 10

A firm can fund an expansion of its operations by

Accepted Answer

A)   issuing bonds.
B)   buying stock.
C)   paying dividends.
D)   loaning money.

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

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 13

A(n) ________ comes to an end with a business cycle ________.

Accepted Answer

A)   recession; peak
B)   recession; trough
C)   expansion; trough
D)   expansion; bubble

Question 14

When a recession ends

Accepted Answer

A)   interest rates decrease.
B)   households decrease spending on durable goods.
C)   the household sector decreases spending substantially.
D)   firms increase the amount of borrowing.

Question 15

Table 14-2
   Year  Real GDP (billions of 2000 dollars)  2015$10,100201610,950201711,425201811,300\begin{array}{|c|c|}\hline 	ext { Year } & \begin{array}{c}	ext { Real GDP (billions of } \2000 	ext { dollars)  }\end{array} \\hline 2015 & \$ 10,100 \\hline 2016 & 10,950 \\hline 2017 & 11,425 \\hline 2018 & 11,300 \\hline\end{array} Year 2015201620172018​ Real GDP (billions of 2000 dollars)  ​$10,10010,95011,42511,300​​ 
-Refer to Table 14-2.Using the table above,what is the approximate growth rate of real GDP from 2016 to 2017?

Accepted Answer

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

Question 16

Because of technological change,oil companies like Chevron were able to produce almost twice as much output from refineries in 2016 as in 1950 while using 60 percent fewer workers.This represents ________ in output per worker,which is also known as ________.

Accepted Answer

A)   an increase; labor productivity
B)   a decrease; structural unemployment
C)   an increase; crowding out
D)   a decrease; capital growth

Question 17

Labor productivity will increase if the ________ increases and ________.

Accepted Answer

A)   quantity of capital per hour worked; technology improves
B)   quantity of labor per unit of capital; technology improves
C)   quantity of capital per hour worked; immigration increases while capital is fixed
D)   quantity of labor per unit of capital; immigration increases while capital is fixed

Question 18

How does a decrease in the tax rate on income earned on saving affect saving,investment,the interest rate,and economic growth?

Accepted Answer

One determinant of the amount of househo...

Question 19

What is one difference between stocks and bonds?

Accepted Answer

A)   Bonds earn a higher rate of return than stocks.
B)   Stocks earn a higher rate of return than bonds.
C)   Bonds are purchased at a bank, while stocks are purchased through the federal government.
D)   Stocks represent partial ownership in a firm, while bonds do not.

Question 20

Scenario 14-1
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 14-1.Based on the information above,what is the level of public saving?

Accepted Answer

A)   $0
B)   $1 trillion
C)   $2 trillion
D)   negative $1 trillion (a deficit of $1 trillion)

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

Correct Answer
verified

One difference between stocks and bonds is that

Correct Answer
verified

Long-run economic growth requires all of the following except

Correct Answer
verified

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

Correct Answer
verified

A(n) comes to an end with a business cycle .

Correct Answer
verified

Which of the following would increase public saving?

Correct Answer
verified

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

Correct Answer
verified

Scenario 14-1 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 14-1.Based on the information above,what is the level of public saving?

Correct Answer
verified

During a recession,spending on tends to fall more dramatically than spending on .

Correct Answer
verified

Given the following economic data,what is the value of investment in a closed economy? Y = $10 trillion C = $5 trillion TR = $2 trillion G = $2 trillion

Correct Answer
verified

What is one difference between stocks and bonds?

Correct Answer
verified

A firm can fund an expansion of its operations by

Correct Answer
verified

How does a decrease in the tax rate on income earned on saving affect saving,investment,the interest rate,and economic growth?

Correct Answer
verified
One determinant of the amount of househo...
View Answer

From 1950 - 2007,recessions in the United States

Correct Answer
verified

For the recessions in the United States since the 1950s

Correct Answer
verified

Labor productivity will increase if the increases and .

Correct Answer
verified

Because of technological change,oil companies like Chevron were able to produce almost twice as much output from refineries in 2016 as in 1950 while using 60 percent fewer workers.This represents in output per worker,which is also known as .

Correct Answer
verified

When a recession ends

Correct Answer
verified

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

Correct Answer
verified

Retained earnings are always sufficient to finance a firm's rapid expansion in a high-growth economy.

Correct Answer
verified

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

Correct AnswerverifiedShow Answer

One difference between stocks and bonds is that

Correct AnswerverifiedShow Answer

Long-run economic growth requires all of the following except

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A(n) ________ comes to an end with a business cycle ________.

Correct AnswerverifiedShow Answer

Which of the following would increase public saving?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Scenario 14-1 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 14-1.Based on the information above,what is the level of public saving?

Correct AnswerverifiedShow Answer

During a recession,spending on ________ tends to fall more dramatically than spending on ________.

Correct AnswerverifiedShow Answer

Given the following economic data,what is the value of investment in a closed economy? Y = $10 trillion C = $5 trillion TR = $2 trillion G = $2 trillion

Correct AnswerverifiedShow Answer

What is one difference between stocks and bonds?

Correct AnswerverifiedShow Answer

A firm can fund an expansion of its operations by

Correct AnswerverifiedShow Answer

How does a decrease in the tax rate on income earned on saving affect saving,investment,the interest rate,and economic growth?

Correct AnswerverifiedOne determinant of the amount of househo...View AnswerShow Answer

From 1950 - 2007,recessions in the United States

Correct AnswerverifiedShow Answer

For the recessions in the United States since the 1950s

Correct AnswerverifiedShow Answer

Labor productivity will increase if the ________ increases and ________.

Correct AnswerverifiedShow Answer

Because of technological change,oil companies like Chevron were able to produce almost twice as much output from refineries in 2016 as in 1950 while using 60 percent fewer workers.This represents ________ in output per worker,which is also known as ________.

Correct AnswerverifiedShow Answer

When a recession ends

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Retained earnings are always sufficient to finance a firm's rapid expansion in a high-growth economy.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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A(n) comes to an end with a business cycle .

Correct Answer
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Correct Answer
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During a recession,spending on tends to fall more dramatically than spending on .

Correct Answer
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Correct Answer
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Correct Answer
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One determinant of the amount of househo...
View Answer

Correct Answer
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Correct Answer
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Labor productivity will increase if the increases and .

Correct Answer
verified

Because of technological change,oil companies like Chevron were able to produce almost twice as much output from refineries in 2016 as in 1950 while using 60 percent fewer workers.This represents in output per worker,which is also known as .

Correct Answer
verified

Correct Answer
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Correct Answer
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