CH 1
Real GDP is often plotted on a logarithmic scale. On such a scale, equal distances on the axis represent equal _____ changes.
percentage
In general, when firms optimize, they maximize _____ given their constraints.
profits
depression
real gdp falls, severe
When an economy experiences _____, the inflation rate usually decreases.
recession
The price of a good is observed to rise at the same time that the quantity purchased rises. This can be explained by a _____ the good.
rise in demand
In the supply and demand model, a change in an exogenous variable will result in a:
shift in either the supply curve or the demand curve.
Most macroeconomists believe that price stickiness is a suitable assumption for studying the behavior of the economy in:
short run only
models
simple representations of reality often using diagrams and equations
In the supply and demand model, a change in the price of the factors of production will result in a shift in:
supply curve
Real GDP measures
total income of everyone in the economy
endogenous
variables a model tries to explain
models two different variables are
endogenous and exogenous
The price of a good is observed to fall at the same time that the quantity purchased falls. This can be explained by a _____ the good.
fall in demand for
deflation
falling of prices
recession
real gdp falls and is mild
unemployment rate
the fraction that is in the labor force and out of work
exogenous
variables a model takes as given
inflation rate
how fast prices are rising
market clearing
An assumption that prices are flexible, adjust to equate supply and demand.
flexible prices
Prices that adjust quickly to equilibrate supply and demand
sticky prices
Prices that do not always adjust rapidly to maintain equality between quantity supplied and quantity demanded.
All of the following statements about macroeconomic data are true EXCEPT that macroeconomic data:
are obtained from controlled experiments