macro
Which of the following is an example of a public good?
a weather warning system
A person should consume more of something when its marginal
benefit exceeds its marginal cost
" Consumer sovereignty " means that
buyers determine what will be produced based on their " dollar votes " for the goods and services offered by sellers .
The industries or sectors of the economy in which business cycle fluctuations Tend to affect output most are
capital goods and durable consumer goods
Which of the following is a distinguishing feature of a command system
central planning
Fiscal policy refers to
deliberate changes in government spending and taxes to promote economic growth, full employment, and price level stability.
Transfer payments are
excluded when calculating GDP because they do not reflect current production.
The upward slope of the supply curve reflects the
law of supply
A decline in investment will shift the A.D. curve to the
left by a multiple of the change in investment.
The two main characteristics of a public good are
nonrivalry and nonexcludability
Official unemployment statistics
understate unemployment because discouraged workers are not counted as unemployed.
Suppose that tacos and pizza are substitutes , and that soda and pizza are complements . We would expect an increase in the price of pizza to A ) reduce the demand for tacos and increase the demand for soda . ( B ) reduce the demand for soda and increase the demand for tacos . C ) increase the demand for both soda and tacos . D ) reduce the demand for both soda and tacos
( B )
The interest rate affect suggest that
An increase in the price level will increase the demand for money, increase, interest rates, and decrease consumption and investment spending
The following factors explain the inverse relationship between the price level, and the total demand for output
Real balance effact, interest, rate, affect, foreign purchases affect
Attaining allocative efficiency means that
Resources are being devoted to the production of products most desired by society
A price index of
The price of a market basket in a given year divided by the price of an identical market basket in a reference year
By an " increase in demand economists mean that
The quantity demanded at each price in a set of prices is greater
The consumption schedule shows
a direct relationship between aggregate consumption and aggregate income.
When economists refer to scarcity they are referring to
a situation where what we want exceeds what we have .
In which phase of the business cycle will the economy most likely experience rising, real GDP and employment
expansion
Part-time workers who want full-time work are counted as:
fully employed and therefore the official unemployment rate may understate the level of unemployment.
The most important determinant of consumer spending is
level of income
An increase in the demand for online streaming music indicates that more is
purchased even if prices of online streaming music stayed the same.
When the price of a product rises , consumers with a given money income shift their purchases to other products whose prices are now relatively lower This statement describes
the substitution effect
The idea in economics that " there is no free lunch " means that
there are opportunity costs involved even in free lunches
if the marginal propensity to consume is 0.6 then the marginal propensity to save it must be.
0.4
If there is a surplus of a product, it's price
Is above the equilibrium level
Expansionary fiscal policy is named because
It's designed to expand real GDP
If farmers with haul some of their current corn harvest from the market, because they anticipate a higher price of corn in the near future, then this would
Leftward shift in the current supply of corn
The real balances effect on aggregate demand suggest that a
Lower price level will increase the real value of many financial assets in there for it, cause an increase in spending
The foreign purchases affect
Move the economy, a long, a fixed aggregate demand curve
The change in real GDP, resulting from an initial change in spending can be calculated by
Multiplying the multiplier by the initial change in spending
Toll, free roads, sometimes get extremely congested, such as during rush hour traffic. During those times, we would say that these roads are.
Nonexcludable and rival
If we say that a price is too high to clear the market, we mean that
Quantity supplied exceeds quantity demanded
The amount of real output that could be purchased at current prices, if all of our assets or liquidated, and the money used to purchase goods and services
Real balances affect
The market system automatically corrects a surplus condition in a competitive market by
Reducing the price of the product in question while increasing the quantity demanded
If product, why is a normal, good, and increase in consumer income will
Shift the demand curve for product Y to the right
One of the most important views expressed by classical macro economics, was that
Supply create its own demand
Consumer surplus
The difference between the maximum price consumers are willing to pay for a product in the lower equilibrium price
Which of the following is the best example of a macroeconomic statement
The high rate of inflation is reducing household buying power across the country
What would best explain why the equilibrium price of pink salmon decreased, and the equilibrium quantity increased
The increase in supply was greater than the decrease in demand.
Economic growth in a fully employed economy may be represented by
a rightward shift of the production possibilities curve
In deriving the aggregate demand curve from the aggregate, expenditures model, we note that
an increase (decrease) in the price level shifts the aggregate expenditures schedule downward (upward).
Which one of the following would increase per unit production cost, and therefore shift the aggregate supply curve to the left
an increase in the price of imported resources
Markets , viewed from the perspective of the supply and demand model ,
assume many buyers and many sellers of a standardized product
The production technique that is most efficient is the one that produces a given amount of output
at the lowest cost
When the price of oil increases significantly, the price of gasoline also increases. The ladder occurs because of a.
decrease in supply of gasoline
The relationship between quantity supplied and price is and the relationship between quantity demanded and price is
direct ; inverse
An economic system
is a particular set of institutional arrangements and a coordinating mechanism used respond to the economizing problem
Public goods are those for which there
is nonrivalry and nonexcludability.
The French term " laissez - faire " means
let it be .
The GDP price index equals
nominal GDP divided by real GDP
The aggregate supply curve is upsloping because
per-unit production cost rise as the economy moves toward and beyond its full-employment real output
The two basic markets shown by the simple circular flow model are
product and resource
Other things, equal, and improvement and productivity will
shift the aggregate supply curve to the right.
An increase in investment spending caused by a higher expected rate of return well
shift the aggregate, expenditures curve upward, and the aggregate demand curve to the right
A recessionary expenditure, Gap exists if
the aggregate expenditures schedule lies below the 45-degree line at the full-employment GDP.
Opportunity costs exist because
the decision to engage in one activity means forgoing some other activity
Graphically the market demand curve is
the horizontal sum of individual demand curves
When investment remains the same at each level of GDP in a private closed economy, the slope of the aggregate expenditures scheduled
Equals the MPC
United States would have affected the production possibilities curve
It would shift the production possibilities curve in
GDP can be calculated by summing
Personal consumption, investment, government purchases, and net exports
In representative democracy, voters are______and politicians are____
Principles, agents
The pursuit through government for special benefits at someone else's expense refers to
Rent seeking behavior
Which of the following is one of the Five Fundamental Questions
What goods and services will be produced ?
Other things, equal, and increase in the market price caused by change in supply
decrease consumer surplus
Net exports are
exports less imports
The natural rate of unemployment is the
full-employment unemployment rate
The simple circular flow model shows that
households are on the selling side of the resource market and on the buying side of the product market .
You should decide to go to a movie
if the marginal benefit of the movie exceeds its marginal cost .
The determinants of aggregate supply
include resource prices and resource productivity
Economics may best be defined as the
social science concerned with how individuals , institutions , and society make optimal choices under conditions of scarcity .
Other things, equal, if the price of a key resources used to produce product, X fails, the
supply curve a product X will shift to the right
dissaving means
that households are spending more than their current incomes.
Which of the following does not illustrate the idea of creative destruction
A firm has to destroy some of the expired products in its inventory
Which of the following is correct?
APC plus APS equals one
A table of numbers showing the total amount spent on final good and final services at different levels of real gross domestic product is
Aggregate expenditures schedule
Say, law in classical economics, suggest that over a period of time
Aggregate spending would tend to equal total output and income
Which of the following is an example of economic investment?
B & O railroad buys a new rail cars for their trains
The 2.2 trillion cares act was designed to.
Boost, aggregate, expenditures, reduce recessionary gap's, increased real GDP in employment
What is the term for the level of disposable income at which household plan to consume all their income and to save none of it
Break even income
Recurring increases and decreases in an economy's real GDP, over periods of years are called
Business cycles
Given the annual rate of economic growth, the "rule of 70 "allows one to
Calculate the number of years required for real GDP to double
Real GDP per capita
Can grow either more slowly or more rapidly than real GDP
Which of the following is the best example of a microeconomic statement
Car prices have increased recently because of a microchip shortage
Inflation caused by a rise in the prices of input is referred to as
Cost push inflation
GDP does not include which of the following activities
Couples remodeling their own homes
Savings are generated when ever
Current income exceeds current spending
If personal income taxes and business taxes increase, then this will
Decrease aggregate demand and aggregate supply
Demand side market failure occurs when
Demand curves, underreport, how much consumers are willing to pay for a good or service
The short run aggregate supply curve shows the
Direct relationship between the price level and real GDP produced
The aggregate demand curve is
Downward sloping because of the interest rate, real balances, and foreign purchases of facts
economic growth is best defined as increase in
Either real GDP or real GDP per capita
Market failure is said to occur when ever
Output is being produced for which minimum acceptable price does not equal maximum willingness to pay
When the price of a product increases , a consumer is not able to buy as much of it with a given money income . This describes the
inflationary income effect
Discretionary fiscal policy refers to
intentional changes in taxes and government expenditures made by Congress to stabilize the economy.
All else equal, a large decline in the real interest rate will shift the
investment schedule upward.
Modern economic growth refers to countries that have experienced an increase in
output per person
Which of the following is a feature of laissez faire capitalism
people are free to interact in markets to buy and sell goods and services
The largest expenditure component of GDP is
personal consumption expenditures