ARE final

final goods and services produced in the economy in a given period

GDP is the total dollar value of all:

can lead to prolonged recessions

Keynesians argue that low levels of spending:

b. an automobile

The best example of a private good is: a. law enforcement b. an automobile c. public education d. national defense

John Maynard Keynes

The economist whose writings in the 1930s argued that the cause of an economic depression is inadequate spending was:

the inability to exclude non payers

The free-rider problem is a direct result of:

measures the economy, black market (not counted in the U.S.)

What does GDP really do?

2.4%

What is the actual US inflation rate as of March 2017?

U-3

What is the official unemployment rate?

deflation

a falling overall level of prices

non rival good

a good when more than 1 person can consume the same unit of the good at the same time; EX: digital music, movie

excludable good

a good when people who don't pay can be easily prevented from using it; EX: college

non excludable good

a good when people who don't pay can't be easily prevented from using it; EX: national defense

rival good

a good when the same unit of the good can't be consumed by more than 1 person at a time; EX: cheeseburger

market basket

a hypothetical set of consumer purchase of goods and services

aggregate price level

a measure of the overall level of prices in the economy

a trade deficit

A nation whose value of imports exceeds its value of exports is said to have:

expansion

A period of rising real GDP is an:

unemployed and part of the labor force

A person who has no job but is looking for one is:

not counted in the unemployment statistics

A person who is not working and is not looking for work is:

monetary

Changing interest rates is an example of ___ policy.

fiscal

Changing the level of government spending is an example of ___ policy.

over consumed

Common resources tend to be ___ in private markets.

market failure

free market equilibrium not providing the socially optimal amount of a good

external costs (negative externality)

if it imposes costs on others; EX: air pollution, texting while driving

external benefits (positive externality)

if the 3rd party benefits; EX: education

free rider problem

many individuals are unwilling to pay for their own consumption and instead will take a free ride on anyone who does pay

public good

non excludable and non rival; because this good is non excludable, it is difficult to get people to pay for it voluntarily and because this good is non rival, production costs do not significantly change with additional users

common resources

non excludable and rival; consumers can't be excluded from consuming these goods but when anyone consumes it, there is 1 less for everyone else; there is a strong incentive to consume these goods before others

discouraged workers

nonworking people who have given up looking for work for the time being, not considered unemployed

underemployed workers

people who work part time because they can't find a full time job

paradox of thrift

reduction in spending depresses the economy as consumers spend less and businesses react by laying off workers

trade surplus

the value of goods and services bought from foreigners is less than the value of goods and services sold to them; imports value is less than exports value

too much pollution

A market economy will produce ___ without any government regulation.

artificially scarce good

A very large museum could accommodate many more visitors than it does without reducing the enjoyment of the visitors if it didn't charge such a high price for admission. Visits to the museum are an:

cannot; cannot

A whale is a common resource because the private market ___ prevent consumption by people who do not pay for it, and the same whale ___ be consumed more than once.

exceed

Activities that generate external costs will likely be carried out at levels that ___ those that would be efficient.

4.5%

As of March 2017, what was the official unemployment rate (U-3)?

2.1%

How much did real GDP increase in the fourth quarter of 2016?

there will be too much pollution

If an emissions tax is too low:

fallen

If real GDP rises while nominal GDP falls, then prices on average have:

less than 3%

If the economy grew at 3% this year and average prices increased ___, people would be better off this year than last year.

remain unchanged

If the price level and nominal GDP both doubled, then real GDP would:

negative

In general, for the U.S. economy, the relation between unemployment and economic growth is:

increase in the overall level of prices

Inflation is an:

non rival; non excludable; under provided

Most neighborhood streets are illuminated at night by streetlights. The streetlights are ___ and ____. Therefore, they are likely to be ___ by the competitive market.

within

Only production that takes place ___ the borders of a country is included in GDP.

recessions

Periods in which output and employment are falling are:

external costs

Pigouvian taxes are designed to reduce:

an incomplete measure of a country's standard of living

Real GDP per capita is:

private goods

The market can efficiently produce only ___ (if there are no externalities present).

the size of the economy

The most important use of GDP is a measure of:

unemployment rate

The most widely used indicator of the conditions in the labor market is the:

excludes discourages workers

The official unemployment rate reported by the government may tend to understate the amount of unemployment because it:

Simon Kuznets

The person who is usually credited with developing national income accounts is:

the Great Depression

The view that the government should take an active role in the macroeconomy dates to:

environmental standard

When the government attempts to reduce the noise from airplanes by restricting the noise level from a jet engine to less than 50 decibels, it is using an:

d. pay-per-view of a boxing match

Which of the following goods is most likely an artificially scarce good? a. the police department b. tickets to a boxing match c. health care d. pay-per-view of a boxing match

c. national defense

Which of the following is an example of a non excludable good? a. health care b. ice cream c. national defense d. education

not part of the labor force

You are a college student and not working or looking for work. You are:

an environmental standard

Your community requires the sewage treatment plant to process raw sewage so that it is safe to return the water to the environment. This is:

consumer price index

___ is most widely used to measure inflation in the United States.

labor force

all workers, employed and unemployed

Keynesian economics

concept that: economic slumps are caused by inadequate spending, and they can be mitigated by government intervention

private good

excludable and rival; most goods are this type of good; can be efficiently provided in competitive markets

artificially scarce goods

excludable but non rival; markets can provide these goods but do so at an inefficient level; EX: Netflix, wifi

unemployment rate

the % of the total number of people in the labor force who are unemployed

externalities

the impact on 3rd parties of a transaction between others

fiscal policy

uses changes in government spending and taxes to affect overall spending

monetary policy

uses changes in the quantity of money to alter interest rates and affect overall spending

expansions

when output and employment are rising

John Maynard Keynes

who said "In the long run, we are all dead"