Question 1

Which of the following best describes long-run economic growth?

Accepted Answer

The process by which rising productivity increases the average standard of living over time.

Question 2

Suppose real GDP in 2021 was $$21.4$$ trillion and in 2022 was $$21.8$$ trillion. What was the growth rate of real GDP from 2021 to 2022? Use the formula $$	ext{Growth Rate} = \frac{	ext{New Value} - 	ext{Old Value}}{	ext{Old Value}} 	imes 100\%.$$

Accepted Answer

$$1.87\%$$

Question 3

Which of the following is NOT a factor that directly increases labor productivity?

Accepted Answer

An increase in the number of hours worked per worker.

Question 4

If the growth rate of real GDP per capita is $$5\%$$, how many years will it take for real GDP per capita to double according to the Rule of 70?

Accepted Answer

$$14$$ years

Question 5

Which of the following best explains the concept of 'crowding out' in the loanable funds market?

Accepted Answer

A decline in private investment due to increased government borrowing, which raises the real interest rate.

Question 6

In a closed economy, which equation correctly represents investment ($$I$$)?

Accepted Answer

$$I = Y - C - G$$

Question 7

Which of the following is a service provided by the financial system?

Accepted Answer

Risk sharing, liquidity, and information.

Question 8

If the government runs a budget deficit, what is the most likely effect on the market for loanable funds?

Accepted Answer

The supply of loanable funds decreases, raising the equilibrium real interest rate.

Question 9

Which of the following best describes potential GDP?

Accepted Answer

The level of real GDP attained when all firms are operating at capacity.

Question 10

During which phase of the business cycle do interest rates and wages typically rise faster than other prices, and firm profits begin to fall?

Accepted Answer

Near the end of an expansion.

Question 11

Which of the following is a plausible reason why economists cannot reliably predict recessions?

Accepted Answer

Business cycles are not uniform and leading indicators are unreliable.

Question 12

Suppose the average annual growth rates of real GDP for three years are $$-2.2\%$$, $$5.8\%$$, and $$1.9\%. $$What is the average annual growth rate over this period?

Accepted Answer

$$1.83\%$$

Question 13

Which of the following is an example of a financial intermediary?

Accepted Answer

A mutual fund.

Question 14

If technological change makes investments more profitable for firms, what happens in the market for loanable funds?

Accepted Answer

The demand for loanable funds increases, raising the real interest rate and the quantity of funds loaned.

Question 15

Which of the following is a likely effect of a recession on inflation and unemployment?

Accepted Answer

Inflation falls and unemployment rises.

Question 16

Which of the following policies helped explain the Great Moderation in U.S. business cycles?

Accepted Answer

The increasing importance of services and active government stabilization policies.

Question 17

Which of the following is the best example of how economic prosperity can improve health outcomes?

Accepted Answer

Richer nations can devote more resources to healthcare, leading to longer lifespans.

Question 18

Which of the following equations correctly represents total savings ($$S) in a $$closed economy?

Accepted Answer

$$S = (Y + TR - C - T) + (T - G - TR)$$

Question 19

Which of the following is a real-world example of how property rights affect economic growth?

Accepted Answer

Countries with secure property rights attract more investment and experience higher growth.

chapter 10

Guida di studio - Domande di pratica

Study guide - Flashcard