MacroEcon
Terms
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- Macroeconomics is primarily the study of:
- the ENTIRE national economy
- Suppose a newspaper reports that unemployment has risen over the past year. This report deals with what type of economics?
- Macroeconomics
- People with a college degree earn more income than people without one. What is the independent/dependent variable?
- College degree= independent Income= dependent
- An inverse relationship between two variables has is _______ sloping.
- downward
- A relationship for which one variable increases in response to another variable increasing is most accurately called a(n):
- Direct or Positive Relationship
- Economics is the study of the relationship between:
- people's unlimited wants and their scarce resources
- The printing press used to print a textbook is an example of labor, capital, or resource?
- Capital
- Opportunity Costs are best defined as:
- only the HIGHEST valued alternative given up when a choice is made
- Lumber used to make paper for a book is an example of a _______ resource.
- Land
- If you had a choice between attending a football game, going to a concert or throwing up...and you chose throwing up, what would be the Oppurtunity Cost?
- either football or concert, WHICHEVER you prefer!
- The "production possibilities frontier" illustrates what?
- trade-offs facing a society, that more of one product can be produced if more production of another is decreased, maximum amount of resources can be produced with limited resources, and opportunity costs of of alternative choices
- A point inside the "production possibilities frontier" indicates:
- resources are NOT being fully or efficiently used
- Which of the following would NOT shift an economy's "productions possibilities frontier?"
- doubling of the money supply
- What WOULD shift an economy's production possibilities frontier?
- advanced technology, doubling of raw materials, doubling machines, doubling the labor force
- A point laying outside of the "production possibilties frontier" indicates:
- that point is NOT achievable at this time for the nation, given its current resources and technology
- Absolute Advantage occurs when:
- a country can produce a good with FEWER RESOURCES (labor,land,capital) than another country. (Tiger Woods has this.)
- Comparitive Advantage occurs when:
- a country can produce a good at a lower oppurtunity cost. (Kid has this.)
- Canada makes a book in 1 hr and Mexico makes it in 3 hrs. Canada makes a car in 100 hrs. and Mexico makes it in 300 hrs. ____ had "absolute advantage" with books and ____ has "absolute advantage" with cars. ___ has a "comparative advantage" in cars and __
- Canada, Canada, Mexico, Canada
- A MARKET makes possible the exchange of ____ and _____.
- Goods and Services
- What is produced in a market system is determined by:
- consumers
- What is taken into affect when constructing a Demand Curve for good X?
- the price of good X
- All "demand curves" slope down because:
- as the price of the good falls, the quantity demanded increases. (and vise-verse.)
- At the "equilibrium price:"
- everyone in market is satisfied, buyers have bought all they wanted, sellers sold all they wanted, the amount sellers sold is the amount buyers bought
- Prices ABOVE the equilibrium price cause a _____ to develop which leads to a(n) ______ in prices
- surplus, increase
- Inferior goods:
- goods for which demand DECREASES when income INCREASES.
- Normal goods:
- goods for which demand INCREASES as income INCREASES
- If John gets a pay-raise, he demand for "inferior goods" would _____.
- decrease
- More televisions are being sold this year than last year, and at higher prices. This could have been caused by a(n) ______ in ______.
- increase in demand.
- Complementary goods:
- goods that are used together. as the PRICE of one RISES, the DEMAND for the other FALLS. (peanut butter and jelly)
- Substitute goods:
- goods that can replace each other; as the price of one RISES, the demand for the other RISES. (utz vs. snyders)
- New environmental protection would lead to a shift in the ______ curve for Chevrolet?
- supply
- A trade surplus occurs when:
- a countries exports EXCEED its IMPORTS.
- A household is defined as:
- one or more persons who occupy a unit of housing.
- "Consumption Spending" is spending by _____ on goods and services.
- households
- For the use of their resources, owners of LAND recieve:
- Rent
- The three basic types of businesses in the United States are:
- Corporations, Proprietorships, and Partnerships
- Partnerships differ from proprietorships in that:
- Partnerships consist of two or more partners sharing responsibilities of the firm, and proprietorships do not
- Which of the following is subject to "double taxation?"
- dividends
- A Corporation is owned by people who:
- enjoy Limited Liability
- "Financial Intermediaries" are best described as:
- institutions that accept deposits and make loans
- What do households pay to support government services?
- taxes
- "Foreign Exchange" is the:
- money of another country
- Which account in the balance of payments contains all of the activities involving goods and services?
- current
- If a country runs a "current account" deficit it must:
- run a "capital account" surplus.
- Depreciation of the dollar means that foreign product prices are now _____ for the U.S. buyer.
- higher
- Fluctuations in the economy are called:
- Business Cycles
- B.L.S. defines a person as unemployed if he/she:
- does NOT have a job but is actively seeking one.
- If a person work part-time, is he/she considered as employed?
- Yes
- The "unemployment rate" is calculated by taking the _____ and dividing it by the ______.
- numbers of unemployment, labor force
- If the "consumer price index" increases from one year to the next, the economy has experienced:
- inflation
- To calculate the "nominal interest rate," you would add the ______ and the _______.
- real interest rate, and the rate of inflation
- To calculate the "real interest rate," you would subtract the ______ and the _______.
- nominal interest rate, from the rate of inflation
- The "aggregate demand" curve shows:
- an inverse relationship between the expenditures of households, business, government, and the foreign sector and the overall prices
- The "aggregate supply" curve:
- relates total output of the economy to ALTERNATIVE prices
- A decrease in interest rates lead to:
- an increase in investment spending
- The "aggregate demand" curve will shift to the right if:
- consumers expect economic conditions to improve in the near future.
- A decrease in aggregate demand tends to be associated with:
- a lower level of equilibrium real GDP.
- What will result in an increase of aggregate supply?
- technological advances
- In the long run, the aggregate supply curve is ______.
- vertical