(Macroeconomics) ECN-120-003 FINAL
Mutual fund
A _______ is a financial intermediary that creates a stock portfolio and then resells shares of this portfolio to individual investors. Correct!
Patent
A _______ is a government-created temporary monopoly given to an innovator for the use or sale of his or her innovation.
Laffer curve
A _______ is a hypothetical relationship between tax rates and total tax revenue that slopes upward at low tax rates but turns downward when tax rates are very high.
Market Basket
A _______ is a hypothetical set of consumer purchases of goods and services.
Financial Asset
A _______ is a paper claim that entitles the buyer to future income from the seller.
Liquidity trap
A _______ is a situation in which monetary policy is ineffective because the interest rate is down against the zero bound.
Demand schedule
A _______ is a table showing how much of a good or service consumers will want to buy at different prices.
Default
A _______ occurs when a borrower fails to make payments as specified by the loan or bond contract.
Positive Relationship
A _______ occurs when an increase in one variable is associated with an increase in the other variable.
Positive supply shock
A _______ reduces production costs and increases the quantity supplied at any given aggregate price level.
Pie Chart
A _______ shows the share of a total amount that is accounted for by various components, usually expressed in percentages.
Recession
A broad-based downturn, in which output and employment fall in many industries is called a _______.
F
A country has an absolute advantage in producing something if the opportunity cost of that production is lower for that country than for other countries.
Deficit
A country runs a trade _______ when the value of goods and services bought from foreigners is more than the value of goods and services it sells to them.
T
A high minimum wage can cause structural unemployment.
Fterm-19
A linear curve is one in which the slope changes as you move along it.
The zero bound of the nominal interest rate
A liquidity trap results from _______.
True
A net capital inflow can be negative.
Substitutes
A pair of goods are _______ if a rise in the price of one good makes consumer more willing to buy the other good.
Jobless recovery
A period in which real GDP is growing at a below-average rate and unemployment is rising is called a _______.
F
A shift of the demand curve is a change in the quantity demanded of a good arising from a change in the good's price.
T
A shift of the supply curve to the right illustrates an increase in a change in the quantity supplied at any given price.
T
A single producer often produces a mix of goods rather than a single product.
Trade-off
A(n) _______ involves a comparison of costs and benefits.
Model
A(n) _______ is any simplified representation of reality that is used to better understand real-life situations.
Resource
A(n) _______ is anything that can be used to produce something else.
Keynesian
According to _______ economics, economic slumps are caused by inadequate spending and they can be mitigated by government intervention.
Convergence hypothesis
According to the _______ international differences in real GDP per capita tend to narrow over time.
Natural rate hypothesis
According to the _______, any attempt to keep unemployment below a minimum level would lead not just to inflation, but to ever-rising inflation.
Life-cycle hypothesis
According to the _______, consumers plan their spending over a life-time, not just in response to their current disposable income.
Inflation, no long-run
According to the classical model of the price level, an increase in the money supply will cause _____ and _____ increase in real GDP.
$ neutrality
According to the concept of _______, changes in the money supply have no real effects on the economy.
1980
After _______, the velocity of M1 began moving erratically, undermining the case for traditional monetarism.
Illiquid
An asset is _______ if it cannot be quickly converted into cash with relatively little loss of value.
Opposition
An economic situation is in _______ when no individual would be better off doing something different.
Efficient
An economy is _______ if it takes all opportunities to make some people better off without making other people worse off.
Demand Shock
An event that shifts the aggregate demand curve is a _______.
Production possibility frontier
An increase in real GDP means an expansion in the economy's _______.
Rightward
An increase in real GDP shifts the money demand curve _______.
Diversification
An individual can engage in _______ by investing in several different things so that the possible losses are independent events.
Carbon dioxide
Burning coal and oil releases _______ into the atmosphere.
Dot-com
By 2001, the failure of many _______ businesses had led to disillusionment with technology-related investment.
10
By the end of 2011, Greece had to pay an interest rate around _______ times the rate Germany paid on 10-year bonds.
Both Supply and Demand
Changes in expectations can shift the _______ curve.
Vertical
Classical economists believed that the short-run aggregate supply curve is _______.
$125
Consider the following aggregate spending in an economy Consumer spending = $75 Government purchases = $25 Investment spending = $20 Exports = $10 Imports = $5 What is the value of the GDP in this economy?
100
Consider the following economy Year Disposable income Consumer spending 1 100 180 2 350 380 3 300 340 4 400 420 5 375 400 6 500 500 What is the aggregate autonomous consumer spending?
C = 0.8 x YD + 100
Consider the following economy Year Disposable income Consumer spending 1 100 180 2 350 380 3 300 340 4 400 420 5 375 400 6 500 500 What is the aggregate consumption function?
0.8
Consider the following economy Year Disposable income Consumer spending 1 100 180 2 350 380 3 300 340 4 400 420 5 375 400 6 500 500 What is the marginal propensity to consume?
0.2
Consider the following economy Year Disposable income Consumer spending 1 100 180 2 350 380 3 300 340 4 400 420 5 375 400 6 500 500 What is the marginal propensity to save?
5
Consider the following economy Year Disposable income Consumer spending 1 100 180 2 350 380 3 300 340 4 400 420 5 375 400 6 500 500 What is the multiplier?
120
Consider the following economy in a given year. Real GDP = $50 Nominal GDP = $60 What is the GDP deflator for this economy?
2.5%
Consider the following economy. Number of unemployed workers = 5 million Labor force = 150 million What is the unemployment rate for this economy?
20
Consider the following economy: Actual aggregate output = 30 Potential output = 25 What is the Output gap?
4.2%
Consider the following. Price index in Year 2 = 125.0 Price index in Year 1 = 120.0 What is the inflation rate for this economy (rounded to the nearest tenth of a percent)?
Africa
Countries with the lowest income per person ($1,000 or less) are located on which continent?
Hurts borrowers and helps lenders
Deflation _______.
Upward sloping
During periods of low inflation, the short-run aggregate supply curve is:
T
During the Great Depression, it was widely argued that the slump should simply be allowed to run its course.
T
Economics is often tied up in politics.
Technological progress
Economists believe that observed increases in total factor productivity in fact measure the economic effects of _______.
T
Economists tend to be skeptical of any attempt to change people's behavior that does not change their incentives.
Paper money with no intrinsic value.
Fiat money is _______.
Money supply
Friedman and Schwartz shows that business cycles had historically been associated with fluctuations in the _______.
Increased by 80 trillion percent
From 2000 to 2008 Zimbabwe's prices _______.
33
From June 1857 to December 2007 there were _______ business-cycle peaks.
C + I + G + X - IM
GDP=
$100 billion
Given a marginal propensity to consume of 0.5, a $50 billion increase in government purchases of goods and services would increase real GDP by _______.
Commodity $
Gold or silver coins best represent which type of money?
Exports
Goods and services sold to other countries are known as _______.
Inferior
Goods for which demand decreases when income rises are known as _______ goods.
The Fed conducts open-market purchases.
Government debt is monetized when:
F
Government policies cannot change spending.
Macroeconomic
Government spending, taxes, and the control of money are the tools of _______ policy.
3
Government statisticians use _______ different methods to calculate GDP.
T
Historically there has been a strong relationship between the federal government's budget balance and the business cycle.
Subprime lending
Home loans to people who do not meet the usual criteria for borrowing is called _______.
20
How many years would it take for real GDP per capita to double if the growth rate is 3.5% per year?
0.5
If Delta x = 6 and Delta y = 3 then the slope of the line is _______.
Rise if people who were previously discouraged enter the work force but do not find jobs right away
If an economy has just had a serious recession but real GDP is expanding once again, we can expect the unemployment rate to _______.
Above the natural rate
If potential output is higher than actual output, then the unemployment rate is _______.
High
If the interest rate is relatively high then the opportunity costs of holding money is _______
$50 billion
If the marginal propensity to consume is 0.5, what is the rise in real GDP if the government increases government transfers by $50 billion?
$25
If the marginal propensity to consume is 0.6, what is the rise in real GDP if the initial spending was $10?
2
If the slope of a line equals 2 and Delta y = 4 then Delta x equals _______.
Thomas Malthus
In 1798, economist _______ made the fixed quantity of land in the world the basis of a pessimistic prediction about future productivity.
Wesley Mitchell
In 1920, who founded the National Bureau of Economic Research?
A. W. H. Phillips
In 1958, _______ came up with a theory regarding the trade-off between unemployment and inflation.
United States
In 2015, the goods and services bought by _______ from other countries were worth considerably more than the goods and services sold abroad.
2%
In January 2012, the Fed announced that it would set its policy to maintain an approximately _______ inflation rate per year.
Securitization
In _______, a pool of loans is assembled and shares of that pool are sold to investors.
Self-Regulating
In a _______ economy, problems such as unemployment are resolved without government intervention.
T
In each downturn, just about every sector of the U.S. economy cut back on production and on the number of people employed.
expansionary
In general, the Federal Reserve and other central banks tend to engage in _______ monetary policy when actual real GDP is below potential output.
Home Mortgages
In modern American, _______ are the most important source of gains and losses from inflation.
Equity
In most societies, people care about issues of fairness, or _______.
Productivity growth
In the 1980s a number of economists argued that slowdowns in _______, which they attributed to pauses in technological progress, are the main cause of recessions.
T
In the 1990s there was a significant rise in the stock market that increased aggregate demand.
80,000
In the U.S, the Consumer Price Index includes the tabulation of about _______ prices every month.
F
In the U.S., interest rates today are much higher than they were in the late 1970s and early 1980s.
The National Bureau of Economic Research
In the United States, the _______ determines when a recession begins and ends.
Private savings
In the United States, which category contributed the largest percentage to investment spending?
Time lag
In the case of fiscal policy, one key reason for caution is that there are important _______ between when the policy is decided upon and when it is implemented.
Failure
In the case of market _______, the individual pursuit of self-interest found in markets makes society worse off.
T
In the long run, changes in the money supply do not affect the interest rate.
F
In the modern world, natural resources are a much more important determinant of productivity than human or physical capital for a great majority of countries.
F
In the real world, the distinction between firms and households is always clear-cut.
Nominal wages rise at the same rate as prices.
Inflation does NOT reduce purchasing power if:
Residential construction
Interest rates have their clearest effect on one particular form of investment spending: spending on _______.
Post-it note
Introduced in 1981, this product has had surprisingly large benefits for office productivity.
Reducing aggregate demand and worsening the economic downturn, leading to further deflation
Irving Fisher described debt deflation as _______.
F
It is clear that unemployment always rises during recessions and always falls during expansions.
Positive
Keynesian economics claims the short-run aggregate supply curve has a _______ slope.
T
Long-run growth is a relatively modern phenomenon.
Higher
Long-term interest rates are, on average, _______ than short-term rates.
1930s
Macroeconomics emerged as a separate branch of economics in the _______.
T
Many of the sales firms make are not to households, but to other firms.
Cost of living allowances
Many private contracts, including some wage settlements, contain _______ that adjust payments in proportion to the changes to the CPI.
T
Markets move toward equilibrium and work in a predictable way.
Indirect
Money plays a crucial role in generating gains from trade because it makes _______ exchange possible.
Margin
Most economic decisions involve trade-offs at the ________.
T
Most people view potential losses and gains in an asymmetrical way.
T
Most states are required by their state laws to balance their budgets every year.
Frictional unemployment + Structural unemployment
Natural unemployment = _______.
F
Normative economics is about description.
Employers change the working hours of current employees as demand changes
Okun's law is less than a 1:1 ratio because some _______.
Income
One person's spending is another person's _______.
2.9%
Over the past half-century, the national unemployment rate has never dropped below _______.
1890
Overall, world incomes did not start rising until around _______.
Retained earnings
Past profits used to finance investment spending are called _______
T
People must make choices because resources are scarce.
T
Positive Economics occupies most of the time and effort of the economics profession.
Inflation
Printing money to pay the government's bills can lead to the problem of _______.
T
Prodigal spending makes consumers better off than if they had been cautious spenders.
Infrastructure
Roads, power lines, and ports are part of which government policy channel?
Revenue generated by the government's right to print money.
Seigniorage is the _______.
1 year
Short-term interest rates on financials assets mature within less than ______.
pay as you go
Social Security is a _______ system.
F
Technological progress is largely the result of government initiative.
$250,000
The FDIC currently guarantees the first _______ per depositor, per insured bank.
New York
The Federal Reserve Bank of _______ plays a special role: it carries out open-market operations
60%
The Federal Reserve estimates that _______ of the U.S. currency is actually held outside the United States.
Central Bank
The Federal Reserve is a _______.
The unemployment rate at which inflation does not change over time
The NAIRU is _______.
Knickerbocker
The Panic of 1907 began with the failure of the _______ Trust, a large New York City trust that failed when it suffered massive losses in unsuccessful stock market speculation.
Past, future
The Taylor rule method adjusts monetary policy in response to _______ inflation. Inflation targeting is based on a forecast of ______ inflation.
F
The U.S. government is entrusted with ensuring the general economic efficiency of our market economy.
Velocity
The ______ of money is the ratio of nominal GDP to the money supply.
Bureau of Labor Statistics
The _______ collects annual data on family income and spending.
Secret Service
The _______ diligently monitors the integrity of the U.S. currency, promptly investigating any reports of counterfeit dollars.
GDP deflator
The _______ for a given year is 100 times the ratio of nominal GDP to real GDP in that year.
Minimum wage
The _______ is a government-mandated floor on the price of labor.
Rule of 70
The _______ is a mathematical formula that tells us how long it takes real GDP per capita, or any other variable that grows gradually over time, to double.
Discount window
The _______ is an arrangement in which the Federal Reserve stands ready to lend money to banks in trouble.
Consumption function
The _______ is an equation showing how an individual household's consumer spending varies with the household's current disposable income.
Budget deficit
The _______ is the difference between tax revenue and government spending when government spending exceeds tax revenue.
Nominal wage
The _______ is the dollar amount of the wage paid.
U.S Census Bureau
The _______ is the federal agency tasked with collecting data on unemployment.
Reserve ratio
The _______ is the fraction of bank deposits that a bank holds as reserves.
Marginal Propensity to Consume (MPC)
The _______ is the increase in consumer spending when disposable income rises by $1.
Federal Reserve
The _______ is the institution that controls monetary policy.
Labor force participation rate
The _______ is the percentage of the population aged 16 or older that is in the labor force.
Discount rate
The _______ is the rate of interest the Fed charges on loans to banks.
Glass-Steagall Act
The _______ of 1933 separated banks into two categories: commercial banks and investment banks.
Present value
The _______ of X is the amount of money needed today in order to receive X at a future date given the interest rate.
Wealth effect
The _______ of a change in the aggregate price level is the effect on consumer spending caused by the effect of a change in the aggregate price level on the purchasing power of consumers' assets.
Opportunity Cost
The _______ of an item is what you must give up in order to get it.
Federal Open Market Committee
The _______ sets a target value for the federal funds rate.
Fisher effect
The _______ states the expected real interest rate is unaffected by changes in expected future inflation.
Inflation bear
The _______ viewpoint believes that, despite the depressed state of the economy, expansionary monetary policy would cause inflation without raising output.
Great Depression
The _______ was by far the worst economic crisis in U.S. history.
U-6
The broadest measure of unemployment and underemployment is known as ______.
Accountable
The central bank's success can be judged by seeing how closely actual inflation rates have matched the inflation target, making central bankers _______.
Loss of real GDP in the process
The cost of disinflation is the _______.
1913
The creation of the Federal Reserve system in _______ marked the beginning of the modern era of American banking.
F
The demand curve illustrates a positive relationship between the price and demand of goods and services.
Normal
The demand for ________ goods increase when consumer income rises.
F
The economy has price instability when the overall level of prices changes slowly or not at all.
income-expenditure equilibrium
The economy is in _______ when aggregate output, measured by real GDP, is equal to planned aggregate spending.
T
The economy, as a whole, can produce more when a person specializes in a task and trades with others.
Multiplier
The effect of automatic increases in tax revenue is to reduce the size of the _______.
Market-clearing
The equilibrium price is also known as the _______ price.
diminishing returns
The estimated aggregate production function exhibits ______ to physical capital.
Transaction cost
The expenses of actually putting together and executing a deal are known as _______.
October 1
The fiscal year for the U.S. federal government starts on _______.
Interaction
The idea that my choices affect your choices, and vice versa, is a feature of most economic situations is called _______.
T
The individual demand curve shows how the combined quantity demanded by all consumers depends on the market price of that good.
The reduction in the real value of money when inflation rises
The inflation tax refers to _______.
Equilibrium interest rate
The interest rate at which the quantity of loanable funds supplied equals the quantity of loanable funds demanded is the _______.
Real GDP per capita
The key statistic used to track economic growth is _______,
Higher, smaller
The law of demand says that a _______ price for a good or service, other things equal, leads people to demand a _______ quantity of that good or service.
Current Disposable Income
The most important factor affecting a family's consumer spending is its _______.
Great Moderation
The period of relative calm in the economy from 1985 to 2007 came to be know as the _______.
Peak
The point at which the economy turns from expansion to recession is a business cycle _______.
T
The principle that people will exploit opportunities to make themselves better off is the basis of all predictions by economists about individual behavior.
Recession
The rising unemployment rate in 2008 was a sign that a new _______ might be under way.
Unit-of-account
The role of the dollar as a basis for contracts and calculation is called the _______ role of money.
$2.8 trillion
The size of the Social Security trust fund at the end of fiscal year 2016 was _______.
T
The slope of a curve is a measure of how steep it is and indicates how sensitive the variables are to each other.
F
The slope of a given linear curve can change from positive to negative or vice versa.
0
The slope of a horizontal line equals _______.
None of the Above (1, -1, 0)
The slope of a vertical line equals _______.
Negative
The slope of the aggregate demand curve is _______.
Negative
The slope of the demand curve for loanable funds is _______.
Vertical
The slope of the long-run aggregate supply curve is _______.
Negative
The slope of the money demand curve is _______.
Vertical
The slope of the money supply curve is _______ at the money supply chosen by the Federal Reserve.
Positive
The slope of the short-run aggregate supply curve is _______.
Positive
The slope of the supply curve for loanable funds is _______.
New York
The target federal funds rate is enforced by the Open Market Desk of the Federal Reserve Bank of _______.
Ragnar Frisch
The term macroeconomics appears to have been coined in 1933 by _______.
Technology and Factors of Production
The two basic sources of economic growth are _______ and _______.
4
The unemployment number usually quoted in the news media counts someone as unemployed only if he or she has been looking for work during the past ______ weeks.
F
The unemployment rate is a literal measure of the percentage of people who want a job but cannot find one.
Value Added
The way we avoid double-counting is to count only each producer's _______ in the calculation of GDP.
Milton Friedman
The work of _______ led to a consensus that it is important to rein in booms and well as to fight slumps.
T
The zero lower bound for interest rates sets limits to the power of monetary policy.
12
There are _______ Federal Reserve Banks.
T
There are no easy policies that shift the short-run aggregate supply curve.
Surplus
There is a _______ of a good or service when the quantity supplied exceeds the quantity demanded.
Nominal interest rates
There is a zero bound to _______.
25%
Today about _______ of the world's people live in countries with a lower standard of liviing than the United States had a century ago.
F
Two different changes in fiscal policy that have equal-sized effects on the budget balance always have equal effects on the economy.
Chained Dollars
U.S. statistics on real GDP are always expressed in _______.
Number of unemployed workers divided by the Labor force
Unemployment rate = _______ x 100
Checking accounts
Until Regulation Q was eliminated in 1980, U.S. banks were not allowed to offer interest on _______.
It had the world's highest inflation rate.
What distinction did Zimbabwe achieve in June 2008?
5%
What is the growth rate if the real GDP per captia doubled in 14 years?
0.6
What is the marginal propensity to consume if a $50 billion increase in government purchases of goods and services leads to a $125 billion increase in the real GDP?
0.1
What is the marginal propensity to save if the marginal propensity to consume is 0.9?
$909
What is the present value for a future value of $1,000 one year from now and an interest rate of 10%?
2%
What is the real interest rate if the nominal interest rate is 7% and the inflation rate is 5%?
5
What is the value of the multiplier if the marginal propensity to save is 0.2?
Falls, is ambiguous
When both demand and supply decrease, the equilibrium quantity _______ and the change in equilibrium price _______.
Ricardian equivalence
When consumers anticipate that they must pay higher taxes in the future to pay off today's government debt and will cut their spending today in order to save money is known as the _______.
Increases, is ambiguous
When demand increases and supply decreases, the equilibrium price _______ and the change in the equilibrium quantity _______.
Inferior
When income falls, demand for a(n) _______ good increases.
T
When markets go wrong, an appropriately designed government policy can sometimes move society closer to an efficient outcome by changing how society's resources are used.
Store of value
When money allows for a means of holding purchasing power over time, it fulfills which role?
F
When tastes change against a good, fewer people want to buy it at any given price, so the demand curve shifts to the right.
F
When the number of consumers rises, the market demand for the good decreases.
Above the natural rate
When the output gap is negative, the actual unemployment rate is _______.
Increases
When the price is expected to fall in the future, the supply of the good ________ today.
Increases
When the price of a complement in production rises, the supply of the original good _______.
Business Cycle
Whenever there is a prolonged expansion, as there was in the 1960s and again in the 1990s, books and articles come out proclaiming the end of the _______.
Savings deposits
Which category represented the largest percentage of M2 in 2013 in the United States?
Medicare, Medicaid, and the ACA
Which category represented the largest percentage of government spending in 2016?
Housing
Which category represented the largest portion of the Consumer Price Index in 2016?
Consumer Spending
Which category tends to dominate GDP in the U.S.?
When the central bank reduces the quantity of money
Which condition would cause aggregate demand to decrease?
When consumers and firms become more optimistic
Which condition would cause aggregate demand to increase?
When nominal wage falls
Which condition would make the aggregate supply curve increase?
China
Which country experienced the highest average annual growth rate of real GDP per capita during the period of 1980-2015?
Germany
Which country had the lowest ratio of public debt to GDP in 2016?
Federal Reserve, Department of Commerce, Department of Labor
Which government departments employ economists?
African American teenager
Which group of people displayed the highest rates of unemployment in 2007, 2010, and 2017?
National defense
Which of following is not an example of a social insurance program?
Savings and Investment spending
Which of the following factors explain the difference in growth rates related to increasing the stock of physical capital?
Changes in wealth
Which of the following factors would shift the aggregate demand curve?
Changes in commodity price
Which of the following factors would shift the aggregate supply curve?
A cut in taxes
Which of the following fiscal policies increases aggregate demand and is part of expansionary fiscal policy?
Domestically produced final goods and services
Which of the following is included in GDP?
Higher Interest rate
Which of the following is not part of an expansionary monetary policy?
Lower interest rate
Which of the following is not part of contractionary monetary policy?
Personal income taxes
Which source represented the largest percentage of tax revenue for the United States in 2016?
Fiat $
Which type of money is a U.S. dollar bill?
John Maynard Keynes
Who released a book in 1936 titled The General Theory of Employment, Interest, and Money?
John Maynard Keynes
Who stated "In the long run we are all dead" concerning economic policy?
Milton Friedman
______ argued that consumer spending ultimately depends mainly on the income people expect to have over the long-term rather than on their current income.
Embedded
______ inflation is inflation that people believe will persist into the future.
Stagflation
______ is the combination of inflation and falling aggregate output.
Sticky wages
_______ are nominal wages that are slow to fall even in the face of high unemployment and slow to rise even in the face of labor shortages.
Inventories
_______ are stocks of goods and raw materials that firms hold to facilitate their operations.
Inventories
_______ are stocks of goods held to satisfy future sales.
Factors of Production
_______ are the resources used to produce goods and services.
Factor Markets
_______ are where firms buy the resources they need to produce goods and services.
Milton Friedman
_______ asserted that the best way to manage the economy was with non-activist or nondiscretionary monetary policy.
monetarism
_______ asserts that GDP will grow steadily if the money supply grows steadily.
Rational expectations
_______ claims that individuals and firms make decisions optimally, using all available information
Shoe-leather
_______ costs are the increased costs of transactions caused by inflation.
Long run
_______ economic growth is the sustained upward trend in the economy's output over time.
Macroeconomics
_______ focuses on the behavior of the economy as a whole.
Keynesian macroeconomists
_______ gave fiscal policy a central role in fighting recessions.
Classical macroeconomists
_______ generally believed that expansionary monetary policy was ineffective or even harmful in fighting recessions.
Quantitative easing
_______ involves buying assets other than short-term government debt, notably long-term debt whose interest rate is significantly above zero.
Trade
_______ involves providing goods and services to others and receiving good and services in return.
Thomas Edison
_______ is credited with inventing research and development.
Gross National Product
_______ is defined as the total factor income earned by residents of a country.
Human capital
_______ is the improvement in labor created by the education and knowledge embodied in the workforce.
Potential output
_______ is the level of real GDP the economy would produce if all prices, including nominal wages, were fully flexible.
Disinflation
_______ is the process of bringing the inflation rate down.
Real GDP
_______ is the total value of all final goods and services produced in the economy during a given year, calculated using the price of a selected base year.
Gross Domestic Product
_______ is the total value of all final goods and services produced in the economy during a given year.
Econometrics
_______ is the use of statistical techniques to fit economic models to empirical data.
Implicit
_______ liabilities are spending promises made by governments that are effectively a debt despite the fact that they are not included in the usual debt statistics.
Crowding out
_______ occurs when a government budget deficit drives up the interest rate and leads to reduced investment spending.
Frictional
_______ unemployment is unemployment due to the time workers spend in job search.
monetary policy
_______ uses changes in the quantity of money to alter interest rates, which in turn affect the level of overall spending.
Marginally attached
_______ workers would like to be employed and have looked for a job in the recent past, but are not currently looking for work.
M1
_______, the narrowest definition, contains only currency in circulation, traveler's checks, and checkable bank deposits.