Glossary of Econ 202 final exam

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what is equation for GDP?
how many fed reserve banks r there?
each bank has a board of how many directors?
what was the 3rd quarter rise in real GDP?
who sets agenda for board of govs?
who sets discount rate
board of govs
what is a "camel"
rating standard from 1-5 (5 is worst)
how many times a year does the FOMC meet?
8 times
tax on commodity that can enter a country; absolute imit
customs union
2 or more countries that abolish trade restrictions among themselves and levy a common tariff against outsiders (most successful= European union of 25 countries)
free trade area?
2 or more countries abolishing all trade restrictions among themselves, but not setting a common tariff against outsiders. most famous= North american free trade area
how countries int'l and domestic differ; not in reason/benefit from trade
how many countries in europe adopted currency for euro?
Milton Friedman?
nobel prize winner for "capitalism and freedom"; when dealing in the mktplace, every person has freedom of choice to accept or reject what is offered or to select a preferred item or even brand out of a variety of alternatives.
proportion of work force tha tis involutarily unemployed, varies inversely w/ real physical output; higher level of output= lower unemployment
process of rising price levels; t is computated as a weighted av of yeraly change in prices of individual products, where the weigh of each product corresponds to its relative importance in the consumer basket
concerned with AGGREGATE performance of the economy; highlights the problems of unemployment, inflation, and long-run growth.
most widely used measure of national output; money value of all FINAL goods and services produced each year.
real GDP
GDP adjusted for inflation
decline in real GDP for 2 or more successive quarters
simultaneous existence of unemployment and inflation
monetary policy
conducted by central bank, is an effective instrument in stabilizing and guiding the course of the economy; it is a demand management tool. its long-run objective is to maintain a growth rate in teh money stock comparable to that of real output
3 types of quantitative measure the Fed can employ in times of inflationary boom=
increase legal reserve ratio of banks, increase the discount rate, sell gov bonds on the open market
in times of recession, the Fed may:
lower reserve requirements, reduce discoun rate, buy gov bonds on the open market to infuse money into the economy
eq. of exchange
prof Friedman and monetarists believe that:
private economy is inherently stable and attribute most if not all economic fluctuations to the destabilizing effects of misguided large and rapid changes in the money stock
Keynesians believe that:
private economy requires stabilization policy that while money matters, other things matter as well; and tat a judicious mix of discretionary fiscal and monetary policy is needed to stabilize the economy
when does demand inflation occur?
when aggregate demand is increased along the upward portion of the aggregate-supply curve

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