Question 1

Increases in real GDP since 1900 can actually underestimate growth in the standard of living for Americans since 1900 because

Accepted Answer

A)   the level of pollution in 1900 was much higher than it is today.
B)   the crime rate was higher in 1900 than it is today.
C)   goods and services are more expensive today as compared to 1900.
D)   the quality of health care that exists today was not available in 1900.

Question 2

Potential GDP is always greater than real GDP in an economy.

Accepted Answer

A) True 
 B)False

Question 3

How are unemployment,inflation,and the business cycle related?

Accepted Answer

A recessionary phase of a business cycle...

Question 4

Figure 14-1
 
-Refer to Figure 14-1.Which of the following is consistent with the graph depicted above?

Accepted Answer

A)   An expected recession decreases the profitability of new investment.
B)   Technological change increases the profitability of new investment.
C)   The government runs a budget surplus.
D)   Households become spendthrifts and begin to save less.

Question 5

Which of the following will result in an increase in labor productivity?

Accepted Answer

A)   a decrease in the number of people attending institutions of higher education
B)   a decline in the amount of human capital per worker
C)   an increase in technology
D)   a decline in the capital stock per hour worked

Question 6

From 1991 until 2001,the United States was in a period of

Accepted Answer

A)   expansion.
B)   recession.
C)   business cycle troughs.
D)   business cycle peaks.

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

Potential GDP was estimated to grow at a rate of 3.2% from 1949-2017 in the United States.Actual GDP in the U.S.

Accepted Answer

A)   always grows at a slower rate than potential GDP.
B)   always grows at a faster rate than potential GDP.
C)   always grows at the same rate as potential GDP.
D)   is the same as potential GDP if all firms in the economy were working at capacity.

Question 9

Which of the following explains why employment only rises at a slow pace at the end of a recession?

Accepted Answer

A)   Firms are hesitant to rehire laid off workers as they continue to operate below capacity.
B)   Firms rapidly hire new workers at the first sign of an increase in demand for their goods.
C)   Discouraged workers return to the labor force, and this makes the unemployment rate fall.
D)   Discouraged workers leave the labor force, and this makes the unemployment rate rise.

Question 10

Figure 14-2
 
-Refer to Figure 14-2.Which of the following is consistent with the graph depicted above?

Accepted Answer

A)   An expected expansion increases the profitability of new investment.
B)   The government runs a budget surplus.
C)   Investment spending is declining due to crowding out.
D)   New government regulations decrease the profitability of new investment.

Question 11

According to the National Bureau of Economic Research,the recession that began in December 2007

Accepted Answer

A)   lasted 12 months.
B)   lasted 18 months.
C)   lasted 27 months.
D)   did not end until December 2011.

Question 12

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.

Question 13

The federal budget deficit can be reduced by

Accepted Answer

A)   raising taxes.
B)   raising government spending.
C)   raising transfer payments.
D)   higher interest rates.

Question 14

Actual real GDP will be above potential GDP if

Accepted Answer

A)   firms are producing below capacity.
B)   firms are producing at capacity.
C)   firms are producing above capacity.
D)   inflation is rising.

Question 15

The economic effects of a recession are likely to have the smallest impact on the sales of which of the following businesses?

Accepted Answer

A)   an automobile manufacturer
B)   a furniture store
C)   a fast-food restaurant
D)   a home builder

Question 16

________ are financial securities that represent promises to repay a fixed amount of funds.

Accepted Answer

A)   Stocks
B)   Bonds
C)   Interest rates
D)   Mutual funds

Question 17

Which of the following increases labor productivity?

Accepted Answer

A)   an increase in the aggregate hours of work
B)   decreases in the availability of computers and factory buildings
C)   inventions of new machinery, equipment, or software
D)   a decline in the health of the population

Question 18

During the expansion phase of the business cycle,which of the following eventually increases?

Accepted Answer

A)   production
B)   employment
C)   income
D)   all of the above

Question 19

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 Committee

Question 20

What is labor productivity? How does a country's standard of living relate to labor productivity?

Accepted Answer

Labor productivity refers to the amount ...

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

During the expansion phase of the business cycle,which of the following eventually increases?

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Figure 14-2 -Refer to Figure 14-2.Which of the following is consistent with the graph depicted above?

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

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Which of the following increases labor productivity?

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Figure 14-1 -Refer to Figure 14-1.Which of the following is consistent with the graph depicted above?

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What is labor productivity? How does a country's standard of living relate to labor productivity?

Correct AnswerverifiedLabor productivity refers to the amount ...View AnswerShow Answer

How are unemployment,inflation,and the business cycle related?

Correct AnswerverifiedA recessionary phase of a business cycle...View AnswerShow Answer

The federal budget deficit can be reduced by

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The economic effects of a recession are likely to have the smallest impact on the sales of which of the following businesses?

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Increases in real GDP since 1900 can actually underestimate growth in the standard of living for Americans since 1900 because

Correct AnswerverifiedShow Answer

Private saving is defined as

Correct AnswerverifiedShow Answer

________ are financial securities that represent promises to repay a fixed amount of funds.

Correct AnswerverifiedShow Answer

Which of the following explains why employment only rises at a slow pace at the end of a recession?

Correct AnswerverifiedShow Answer

According to the National Bureau of Economic Research,the recession that began in December 2007

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Potential GDP was estimated to grow at a rate of 3.2% from 1949-2017 in the United States.Actual GDP in the U.S.

Correct AnswerverifiedShow Answer

Actual real GDP will be above potential GDP if

Correct AnswerverifiedShow Answer

Which of the following will result in an increase in labor productivity?

Correct AnswerverifiedShow Answer

From 1991 until 2001,the United States was in a period of

Correct AnswerverifiedShow Answer

Potential GDP is always greater than real GDP in an economy.

Correct AnswerverifiedShow Answer

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Labor productivity refers to the amount ...
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A recessionary phase of a business cycle...
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