Test Review Econ
The United States Constitution states that
A law must be passed to approve spending for a government activity
A Decrease in input prices will cause
AD to increase (move to the right)
An Increase in Goverment spending will cause
AD to increase (move to the right)
An Increase In Taxes will cause
AD will decrease (move to the left)
For the Minimum Wage to Be relevant it must be
Above the equilibrium wage
Ceteris Paribus
All thinks held equal all other variables held constant
The purpose of fiscal policy is to
Alter the direction if the economy
Which of the Following would Economists label as an example of the "tragedy of the commons"
Anything that the public shares and gets taken away or destroyed because of misuse
Under the Sherman Anti Trust act it is illegal too
Attempt to become monopolist
Compared to Italy and Japan the debt as a percentage of GDP in the U.S is
Substantially smaller
The Clean Water Act Is
Succeeded in getting many boddies of water in the use to clean levels
Limiting Trade can be accomplished with
Tariff's, quotas,non tariff regulatory barriers
The First Central Bank Of the US was called
The First Bank of The U.S
A wage that is sufficient to keep a family out of poverty is called
The Living wage
A budget deficit is
The amount owed by which expenditures exceed revenues
THe Contesable Markets Hypothesis differs from the Requirements for Perfect Competition in that
The former requires many competitors
the reserve ratio is
The percentage of each dollar deposited in a checking account that a bank must maintain in a federal reserve branch
The law that governs most goverment regulation of monopolys
The sherman antitrust act
Rent Control countinues to survive despite its flaws because
Those displayed by the policy do not love in community and cannot vote to end it.
Those that lose from and increase in minnium wageare
Workers that are laid off
In comparison to perfect competition monopoly price quantity combinations generate
a consumer surplus that is smaller
Which of the Following would be described as the operational lag
a delay in getting a particular plan implemented with the money getting into peoples hands
An example of discretionary fiscal policy would be
a tax cut to stimulate consumption
Expansionary fiscal policy would result in
aggregate demand moving to the right
If a country can with a single unit of labor produce more of both clothing and computers than another country the the first atvantage the country has
an absolute advantage
Using Baseline Budgeting is
an increase in spending is compared to what would be needed to provide the same level of services in that year
Using Current Services Budgeting
an increase in spending is compared to what would be needed to provide the same level of services in that year
Many Economists look at the federal budget and see it should be broken into
an operating budget and a capital budget
Monopolies such as those created by copyrights and patents
are necessary to motivate innovation and authorship
In comparison to prefect competition, monopoly price quantity cobinations generate
as consumer surplus that is smaller
The Federal funds rate is the rate at witch
banks lend to one another to meet reserve requirements
If the Feds wished to deacrese interest rates using an open market operations it would
buy gold
Nobel Laureate economist Ronald Coase suggests that pollution problems could be solved
community property were owned by self interest parties
The interest rate effect, the real balance effect and the foreign purchases effect suggests that the aggregate demand curve is
downward sloping
After Accounting For externalities with a social cost curve, the new equilibrium would be such that
equilibrium price is lower than before and equilibrium quantity is lower than before
Public goods
everyone benefits even if they didn't pay for it
4 Sectors of the ecnomy
gov Sector foreign sector household sector firms sector
Open Market Operations refer to the buying and selling of
government debt
Gennrally Speaking, The last two years of a presidents term are
higher growth than the first two years
Which of the following would be described as the recognition lag
knowing there is a recession
The lowest Wage that may be legally paid for an hours work
minimum wage
The Fedreral Reserve governs US
monetary policy
which of the following are goals for monetary policy
monitoring corruptiona in the securities industry
A country that is limiting imports of good by stating that only a certain number may be imported is using
quotas
A tax on a good whose production causes pollution will
raise the equilibrium price and lower the equilibrium quantity
Montana is in ____Federal Reserve Circuit
the 9th
A budget surplus is
the amount by which revenues exceed expenditures
Eternalities
the effect that a priducer has on a consumer
Discretionary Fiscal Policy differs from non-discretionary policy fiscal in that
the former requires timely decisions whereas the latter is built into the system.
The aggregate supply- Aggregate demand diagram models
the interaction of producers and consumers for a particular good or service
When the Federal Reserve loans money to banks, the rate it charges banks with good credit is called
the primary credit rate
The reasons economists approve of limiting trade targets include
the protection of the enviroment
The Keynesian, Classical and Intermediate rages apply too
the shape of the aggregate supply curve
The concept of "clean enough" to an economist means
the state of cleanliness where the marginal cost of cleaning equals the marginal benefit of cleanin
The Pattern of the 1930's through the middle 1990's was
the total amount owed by the federal government
The national debt is
the total amount owed by the federal government
A nautral monopoly occurs when
there are fixed costs and continuously increasing marginal costs
A global enviromental problem is less easily solved than one confined to a single country because
there is no enforcement of enviromental reguations or taxes for a global problem
Economists refer to the problem that exists when the public propoerty is mistreated
tragedy of the commons
Which of the following environmental problems is too easily solved
waste water treatment
Crowding out is the idea that
when government spending is increased in one area it must be decreased in another.
Members of the Board Of Governors are appointed for
14 Years
The Board Of Governers of the Fedral Reserve system has ___members
7
The Fed has authority to set the reserve requirements. Current The reserve requirment is about
9%`
In the Figure Above How many people would be Unemployed at the minimum wage
Ls-Lmin
Transfer Payments
Medicare GI Bill
Logrolling occurs when
Members of the Congress trade votes to get their programs passed
In the Standard Oil Case the company owened every single part of the production prosses for G&O and was there fore called a
Nautral Monopoly
Pollution Is an example of a
Negative Externality
If a tenent controlled rent is above the equilibrium the result wull be
Nothing different than if there were no rent control
Determining the comparative advantage of a country requires that you look at the economic notion of
Opportunity costs
Households
Owners at the means at production
Firms
People that want the means of production
Falice compsomtion
Premise is true- conclusions is true Genral statements
An economist looks at rent controlled prices as and example of a
Price Ceiling
Economist generally believe that
Private incentives can be used to motivate individuals to act "green"
Micro
Production possibility curve- appendix la.
Rent control laws are typically establishged when
Rents are rising quickly
Factor Market
Sets up a market for means of production
The Largest Single Item in the Fed Budget is
Social Security
Factors Of production
Labor Capitol Land
Factors of Production
Labor Capitol Land Entrenship
Thos that lose from the imposition of rent control are
Landlords
M1 is the total amount of ____in the economy
Checking accounts,coin and paper currency
If with one unit of labor the u.s can produce 10 units of the computer software and 5 units of computer hardware and chinca can produce 3 units of software and 2 units of hardware then
China has a comparative advantage in the hardware and the u.s has a comparative advantage in software
Rent control is more prevelent in
Cities
Fiscal Policy is controlled by
Congress and the President
Suppose the Fed reserve wanted to fight inflation by increasing interest rates. Doing so would
Decrease aggregate demand
Macro
Economy as a whole
Generally, Economists believe that crowding out is
Important but less than complete;one extra dollar of government spending decreases private spending by a dollar
Between 1960 and 2004 the us net position with trade was that
Imports almost always exceed imports
LAws that change the tax code
In the House Of Representatives
The Point of open market operations is too
Increase or decrease the money supply si as ti influence rates
Economists genrally belive that increses in the minnimum wage will
Increase teen unemployment
In reaction to the recession of 2001, a tax cut was passed in which tax rebate checks were sent to millions of american families. This was intended too
Increase the Aggregate demand
The Percentage of the federal debt owned by trust funds has
Increased consistently over the past 20 years
The Clayton antitrust act made the following illegal
Interlocking directorships and price discrimanation
Standard Oil was broken into smaller Buisnesses by the courts because
It dominated every aspect of Oil and gasoline price's