ECON2
What is the economic risk of using quantitative easing?
inflation
Consumers must choose whether they prefer to consume goods, including money, now or in the future. This is known as:
intertemporal decision making.
Which of the following is an example of a bank asset?
A loan given to a customer by the bank.
How will a negative supply shock affect price levels and unemployment levels?
A negative supply shock will bake both levels rise.
How will a negative supply shock affect price levels and unemployment levels?
A negative supply shock will make both levels rise.
Which of the following examples is excluded from being in the financial market for money?
A neighborhood watch service that charges by the day.
If inflation is decreasing what is likely happening along a Keynesian Phillips curve?
A slight increase in unemployment.
Which of the following is consistent with Keynesian theory?
A typical firm does not change its prices immediately when aggregate demand fluctuates.
The Phillips Curve and the ________ are different ways of showing the same relationship between inflation and unemployment.
AD-AS model
Which of the following is an example of a bank liability?
The savings account interest payment.
In the 1980s President Ronald Reagan greatly supported supply side economics and implemented its policies in the economy. What do supply side economists believe?
When tax rates are reduced it increases aggregate supply.
How do central bank policies affect interest rates?
When the central bank decides to increase the discount rate, then interest rates increase.
Looking at a list of where tax revenue is being used for funding, it includes libraries, parks, police and fire protection, hospitals and roads. From this list, it can be accurately concluded that the funding entity for these services is
a State government.
In an economy where the money supply and aggregate demand have been decreased by the Central Bank, you know that the Central Bank is using
a contractionary monetary policy.
An example of a bank asset is ________.
a loan made out to a customer.
Which of the following is NOT an example of an expansionary, discretionary fiscal policy?
an increase in tax rates;
Banks USA consistently makes risky loans to small business. When a recession hits, Banks USA faces.
an increased probability of facing a bank run by depositors
The Fed's seven member ruling board of Governors are
appointed by the president, confirmed by congress, and serve 14-year terms.
A ________ means that government spending and tax revenues are equal.
balanced budget
Functions are often described as cause and effect in economics. In an economics function, if the variable is on the right-hand side and is doing the explaining, it represents a(n) ________?
cause
When the government passes a new law that explicitly increases overall tax rates and reduces spending levels, it is enacting:
discretionary and contractionary
A typical _________ fiscal policy allows government to decrease the level of aggregate demand, through increase in tax rates.
discretionary and contractionary.
If a government reduces tax rates in order to increase the level of aggregate demand, what type of fiscal policy is being used?
discretionary and expansionary
Some highways have commuter or express pass lanes. During rush hour lanes on the highway move slowly or often are stop and go, but the express lanes continue to move at a faster pace. Express pass users pay for a transponder and monthly fees to have express lane access even with no other people in their cars. In this example, the drivers who purchase these express passes are probably
drivers who value speed and convenience more than those in the stop and go lanes and are willing to pay additional express pass fees for the option of avoiding traffic jams.
A neoclassical policy to address unemployment is likely to
help to reduce obstacles that create frictional unemployment.
A major concern of fiscal policy is
how federal government taxing and spending affects aggregate demand
If an economist is trying to predict the outcome from particular causes, what is the best tool(s) for her to use in order to test out her economic model?
mathematical functions
In the 1980s the U.S. Central Bank had the goal of increasing the interest rate and decreasing the money supply. To implement its goal the Central Bank uses a ________ monetary policy.
contractionary
If you were looking to use the safest depository institution for your money, what type of institution would that be?
credit union
Which type of depository institution is considered safest?
credit unions
In an attempt to boost the economy, the government's expansionary fiscal policy would include which of the following?
cutting tax rates
Assume the government has a budget deficit and that the economy is experiencing a recession, tax receipts (collected) by the government are likely to
decrease and increase the budget deficit.
A countercyclical fiscal policy during a recession that effectively boosts an economy does NOT:
decrease unemployment below the natural rate without eventually increasing inflation.
Equilibrium in financial markets occurs at an interest rate where the quantity of loanable funds demanded is
equal to the quantity of loanable funds supplied.
When the interest rate in an economy decreases, it is likely the result of either a/an ________ or a/an ________.
expansionary practice; open market purchase of securities by the Fed.
A bank is more likely to face bank runs by depositors if it
makes risky loans to investors.
Charlie is researching the relationship between the number of hours he spends on social media and his success in his classes. He sets up an equation to better understand the implications of this relationship. This describes a ________.
mathematical function.
Because money functions as a ________ it eliminates the need for bartering.
medium of exchange
Macroeconomic policies that focus on credit and interest rates or controlling the money supply are called
monetary policies.
By changing interest rate and credit through ___________, the Fed address economic concerns such as low GDP or high unemployment
monetary policy
The Fed's efforts to manage interest rates and thus the availability of credit is known as
monetary policy
What serves as a medium of exchange, and is widely accepted as a means of payment?
money
Economic capital is productive, so it does NOT include
money.
If trade between nations is prohibited,
nations will be unable to specialize in what they are good at and therefore end up consuming less.
According to new classical economists, a contractionary monetary policy is effective
only because businesses and households are not expecting lower prices and higher interest rates,so they reduce their investment and consumption.
Which of the following is NOT an important role of the Federal Reserve?
oversee macroeconomic policies outside the U.S.
Which of the following is NOT and important role of the Federal Reserve?
oversee macroeconomics policies outside the U.S
The ability to pay principle of taxation holds that
people with more income should pay more taxes.
In the Keynesian model, the government can respond to a recessionary or inflationary gap by
relying on the spending multiplier to generate a change in real GDP that is a multiple of the change in autonomous spending.
What are the factors of production?
land, economic capital, labor, entrepreneurship
Banks create money through which of the following processes?
lending money
If Mikael decides to go out with his friends instead of study for his biology test, what is the opportunity cost?
less preparation for his biology test
The definition of _______ is the ease with which an asset can be used to buy a service or a good.
liquidity
The ease with which an asset can be used to buy a good or service is the asset's
liquidity
During the Great Recession when the Fed purchased in the open market, sellers held on to the funds instead of depositing them in banks. These actions stalled the interest rate from falling. According to Keynesian beliefs this is called a(n) ________ and the best monetary policy response should be a(n) ________.
liquidity trap; expansionary policy
According to Neoclassical economists the following is a means to stimulate economic growth?
low taxes
Neoclassical economists believe in which of the following views to stimulate economic growth?
low taxes
A Phillips curve shows the tradeoff between inflation and unemployment, so if one is ________.
low the other must be high
In a neoclassical economist's world, an increase in taxes will
lower the price level.
If the FED wants to increase the quantity of money in the economy, it can
lower the reserve requirement.
Bank regulation requires that banks
maintain a minimum net worth in order to protect depositors and creditors.
Former President Ronald Reagan was a supporter of supply side economics. Supply side economists believe that
reducing tax rates increases aggregate supply.
Which of the following is an important role of the Federal Reserve?
regulate the supply of money in the country
Which of the following is an example of an automatic fiscal policy stabilizer?
Tax revenues fall as real GDP decreases.
Property taxes are
generally considered to be regressive.
Which of the following is NOT an important role of the Federal Reserve Bank?
generating profits
When the supply of loanable funds exceeds demand for loanable funds
the interest rate will fall.
Which topic below best applies to microeconomics?
the price that a farmer asks for her watermelons
If a data line on a graph slopes upward as it goes to the right, it is depicting that
the relationship between the variables on the axes is positive.
If the economy is producing more than its potential GDP, ________ show a larger deficit than the actual deficit
the standardized employment deficit
If the economy is producing less than its potential GDP, _____________________ will show a smaller deficit than the actual budget.
the standardized employment deficit.
A flat tax
imposes a single, identical tax rate on the income of all taxpayers.
Assume the government has a balanced budget and that the economy is experiencing a period of growth higher than predicted, tax receipts (collected) by the government are likely to
increase and result in a budget surplus.
Assuming the government of country Balistan has a balanced budget requirement and collects $100 million more in taxes than expected in 2016. As a result, the government would have to
increase spending by $100 million.
The Mid-Merica Bank has a precedent of saying 'yes' to almost any loan asked for by customers(households and firms). Because of the large volume of loans it keeps the minimum amount of cash reserves. In addition to these domestic loans, the Mid-Merica Bank has been supplying a large volume of loans to Nigeria's prince and royal family who are in need of money and funds transferring. According to bank regulations the Mid-Merica Bank would receive ______ by bank regulators.
increased scrutiny
Tax cuts that are explicitly temporary have less impact than permanent ones because
individuals and businesses do not change their behavior very much, since they do not expect the tax cuts to last.
The main risk of quantitative easing is
inflation
The main risk of quantitative easing is ________.
inflation
What happens to the money supply if the Fed raises the discount rate?
it decreases
A bank's T-account includes liabilities which are
items of value the bank owes to someone else.
Which of the following is a true statement about a credit union?
its main focus is to make loan funds to its members.
The Central Bank views unemployment __________ important than inflation.
just as
Economists would say that the decisions we make are influenced by
trade-offs.
During a recession, automatic stabilizers include
unemployment benefits.
Around the world oil is priced consistently in United States dollars. In economic terms this is an example of:
units of account.
What combination of model characteristics are frequently used in the most effective models?
useful and simple.
The macroeconomy, according to neoclassical economists, ________.
will correct itself
Making a purchase with credit means
you are adding to your debt.
Which is inaccurate about banks' deposits?
Banks lend out all of their deposits to earn income.
What is the main reason that fiscal policy lags behind the current economic situation?
Because fiscal policy requires approval by the legislative body.
Why does the recognition lag influence fiscal policy effectiveness?
Because it takes time to collect data on the current state of the economy.
When organizations need money, they often borrow through what main method?
Bonds
Atlantic Bank is required to hold 10% of deposits as reserves. If the central bank increases the discount rate, how would Atlantic Bank respond?
By increasing its reserves.
The statement ___________ matches Keynesian theory.
"A typical business frequently changes its prices to adjust to change in aggregate demand."
Which of the following affects aggregate demand?
Federal government spending.
Which of the following is an example of a financial market?
New York Stock Exchange
Which category accounts for most of the the spending by state and local governments?
education
Sales taxes are
imposed as a percentage of the value of the purchase
Banks that go bankrupt have a ________ net worth.
negative
A negative supply shock will cause price levels and unemployment to
rise
Money creation in the United States results from which of the following?
The process of multiple banks' lending out deposits.
The required reserve ratio for Jack's bank is 10 percent. If Jack deposits $2,000 cash in his checking account, what is the amount of new money the bank would create when it lends out its excess reserves?
$1,800
The required reserve ratio for Julie's bank is 10 percent. If Julie deposits $5,000 cash into her checking account, what amount of new money could the bank create when it lends out its excess reserves?
$4,500
Because of our limited money, time, and effort, we are best off when we allocate things
by constantly assessing the opportunity costs of our choices.
Corporate stock __________.
represents ownership in a firm.
Which of the following is a concern of fiscal policy?
Changes in taxes.
If the theory of rational expectations is correct, then the _________, even in the short run.
Phillips curve should be vertical
What is included in bank supervision?
Ensuring bank net worth remains positive, setting restrictions on investments and minimum reserve requirements.
When banks receive new deposits, they can make new loans and thus create money
only up to the amount of their excess reserves.
A liability in a bank's T-account is
something the bank owes someone else.
If you purchase a good or service with credit it means that
your total debt is increasing.
Every day, 500 airplanes in San Francisco incur an additional 30 minutes of airport delays when flying into or out of the airport. In Chicago, the delays amount to 15 minutes for 1,200 airplanes. If the price of time is $30/hour in San Francisco and $20/hour in Chicago, which airport incurs the largest opportunity cost? A ) Chicago [Incorrect.] Recall the definition and calculation for opportunity cost. B ) Too little information to determine. C ) The opportunity cost would be the same in either city. D ) San Francisco
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If Congress passed a new budget that increased taxes it would A ) [WRONG]reduce the gross domestic product to a new equilibrium as it rises and the aggregate demand shifts to the right. B ) reduce the gross domestic product to a new equilibrium as aggregate demand shifted to the left. C ) increase the gross domestic product to a new equilibrium as aggregate demand shifted to the left
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Given that total spending for a certain household will always include a base amount of $1000/month, and that additional spending is equal to half of any income earned, we can predict total household spending with a model y=b+mx, where A ) m represents total spending. B ) y represents total spending. C ) x represents total spending. Incorrect. This represents the x-axis. D ) b represents total spending.
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When inflation begins to climb to unacceptable levels in the economy, the government should A )[WRONG]use contractionary fiscal policy to shift aggregate demand to the right. B ) use expansionary fiscal policy to shift aggregate demand to the right. C ) use expansionary fiscal policy to shift aggregate demand to the left. D ) use contractionary fiscal policy to shift aggregate demand to the left.
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The goal of the government of Swansia last year was to increase the level of aggregate demand by reducing tax rates. What fiscal policy type did Swansia use? A ) [WRONG] automatic and expansionary B ) contractionary and automatic C ) discretionary and expansionary
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A country's economic data indicates that there has been a substantial reduction in the financial capital available to be borrowed by private sector firms. Which of the following is the most likely cause of this situation?
Especially large and sustained government borrowing.
A critical function of the private banking system is ________?
Establishing the links between savers and borrowers.
How much money can a bank loan out, and make money on, of the banks' newly received deposits?
The bank can loan out only up to the amount of its excess reserves.
Select the following statement that most accurately reflects the banking system?
The banking system leaves a fraction of its deposits in reserves and loans or invest the remainder.
If the reserve requirement is 10 percent and a monetary expansion increases excess reserves by $10 million, the total change in the money supply after all rounds of lending are completed is ________.
100 million
Given X = 22+10-((5/25)*100), X is ________.
12
How many regional Federal Reserve banks are there in the U.S. who primarily support banks and the economy within their respective districts?
12
According to this pie chart, which age group made up almost 38% of the population in the year 1970?
19 and under
A government annually collects $320 billion in tax revenue and allocates $80 billion to education spending. What percentage of this government's budget is spent on education?
25%
A government annually collects $320 billion in tax revenue and allocates $80 billion to education spending. What percentage of this government's budget is spent on education? A ) [WRONG] 30% B ) 12% C ) 1% D ) 25%
25%
A government annually collects $210 billion in tax revenue and allocates $70 billion to military spending. What percentage of this government's budget is spent on its military?
33%
Sam wants to improve his GPA. to earn a 4.0 this semester. His prior GPA was a 2.75. Imagine that there is an equation that says his new GPA could be calculated based on the number of hours he spends studying, his class attendance, and his prior GPA. Written as an equation, it is Grade = (0.50 x hours spent studying) + (0.25 x class attendance hours) + (0.25 x prior GPA). Sam plans to attend class for 4 out of 4 hours each week. Use the equation to determine approximately how many hours per week Sam needs to study to earn a 4.0.
4.6 hours
What is a step a bank can take to protect itself from loan defaults which can lead to recessions?
A bank can diversify its loans.
Which of the following scenarios illustrates a different market other than the financial market for money?
A child's lemonade stand where she charges $1 cash per glass.
Why are banks susceptible to potential bank runs?
Banks keep only fractional funds available, a much higher customer demand to withdraw funds in a short period of time may generate customer panic.
Ceteris paribus, a reduction in the federal funds rate affects car loan rates in the following manner
Car loan rates will decrease.
Which of the following statements is correct?
Central Bank intervention reflects its goals for inflation, unemployment and economic growth.
After the 1970s, what did economists learn?
Changes in the economy in the short-run are best understood by looking at both aggregate demand and aggregate supply.
If a person owns stock in a corporation, what do they own?
Corporate stock represents ownership in a firm.
What is the definition of credit?
Credit is a way to purchase goods or services now when you cannot afford to pay for it all at once with cash.
Read through the following scenarios and select the one that would most likely compel the FED to lower the discount rate.
For the last three months there is a decline in the federal funds market which triggered interest rates dipping below the discount rate.
Which of the following statement(s) about economic models is true?
In the neoclassical model, the real wage adjusts to move the economy to full employment.
What crucial role does the private banking system play in the market?
It establishes a channel between borrowers and savers.
Identity one of the key functions of a bank.
It serves as an intermediary between borrowers and savers.
In this time series graph, the unemployment rate fluctuates from around 4% to 10%. Given this information, if 2017 had an unemployment rate of around 4-5%, was 2017 a year where it was easier or harder to find employment than 1986 and why?
It was more difficult to find work in 1986 because the unemployment rate was close to 6% and thus an economy worse off than the economy of 2017.
If a period of stagflation occurs and shifts the AS curve to the left in the economy, what would happen if an contractionary fiscal or monetary policy is used to stimulate the economy?
It would reduce inflation but increase unemployment and not be a good economic solution.
The Phillips curve is a ________ viewpoint.
Keynesian
Which of the following distinct economic schools of thought is excluded from neoclassical style economics?
Keynesian economics
Which of the following scenarios would be MOST beneficial to a bank?
Kim and Micah decide to move most of their money from a checking account into a savings account.
Which of the following Federal Reserve bank functions is related to moral hazards?
Lender of last resort
________ will often cause monetary policy to be considered counterproductive because it makes it hard for the central bank to know when the policy will take effect.
Long and variable time lags
If another period of stagflation occurs and shifts the AS curve to the left in the economy, what would happen if an expansionary fiscal or monetary policy is used to stimulate the economy?
Lower unemployment but boost inflation and not a good economic solution.
A bill was introduced into Congress last year suggesting changes to the income tax code. Congress now passed this new tax reform act in the last session and over the next few years the new laws will begin to impact the nation. This is an example of what type of policy?
Macroeconomic fiscal policy
What will we never do in a world of scarcity?
Meet all of society's wants.
An example of a financial market is the ___________.
NASDAQ Stock Market
How would you contrast and compare the various approaches to dealing with cyclical unemployment by Keynesian and neoclassical economics?
Neoclassical would suggest doing nothing because the labor market will correct itself. Keynesian would suggest an increase in government spending.
What are some of the unexpected events in a economy that can contribute moving toward a national deficit rather than a surplus?
Personal income decreases and income taxes decline.
According to the Keynesian beliefs, if GDP was $100 million below potential GDP, what should the government do to bring it back to equilibrium?
Raise government spending by something less than $100 million.
According to the order of operations in solving equations, which step should come first?
Simplify inside parentheses and brackets.
Which of the following example(s) describe a regressive tax?
Social Security tax rate of 6.2% on earned income below $117,000 and 0% on income earned above $117,000
Of the following examples, which is an example of an automatic fiscal policy stabilizer?
Tax revenues increase as real GDP increases.
What do bank regulations require of banks?
That banks retain a minimum net worth to protect depositors and creditors.
The _______ is responsible for monitoring the money supply and the general stability and safety of the US banking system.
The Federal Reserve
How would the equation where x=3 and y=4 be represented in a XY graph, and what does it say about the relationship between X and Y?
The beginning point y=4 on the Y axis has a horizontal line straight to the right, X-axis has a vertical line straight up from x=3. With the two points on the graph, there is an intersection point where the x and y will cross each other.
If an economy moves into a recession, causing that country to produce less than potential GDP, then:
automatic stabilizers will cause tax revenue to decrease and government spending to increase.
If the Federal Reserve did not regulate fiscal policy, monitor banks and provide services for banks, what would most likely be the economic conditions to transact business in the U.S.?
The economy would be less efficient and transactions most likely more costly.
According to Keynesian views, what is government's role when it comes to the U.S. economy?
The government has a responsibility to manage the economy.
If an economy moves into an inflationary period, causing that country to produce more than potential GDP, then
automatic stabilizers will cause tax revenue to increase and government spending to decrease.
Land, or natural resources, include(s) the fertility of the land, minerals below it, and
climate.
Silver and gold are examples of what kind of money?
commodity
Which of the following statements about government spending is true?
The share of healthcare spending in GDP has increased substantially since the 1960's.
Why to the seven Federal Reserve remain for a long time with staggered terms on the Fed Board of Governors?
The staggered, longer terms insulate members from current political pressure so they can focus only on economic solutions for the U.S.
Why to the seven Federal Reserve remain for a long time with staggered terms on the Fed Board of Governors?
The staggered, longer terms insulate members from current political pressure so they can focus only on economic solutions for the US
Which assumption below best reflects a basic understanding economists have about the world?
The world has limited productive resources.
What does the FDIC ensure?
There are adequate loanable funding resources to grow the economy by ensuring they are available to investors to generate economic activity.
What is meant by a bank if a loan defaults?
There are customers who do not repay their loans.
Which one of the following statements about a certificate of deposit (CD) is correct?
There is an early withdrawal penalty.
How can banks reduce the chances of a bank run even if they institute riskier lending practices?
They could increase the amount of assets they keep in reserves.
Which of the following accurately describes the banking system?
They put a fraction of their deposits in reserves and then loan out or invest the rest.
In the long run, the Phillips curve will be _______ at the natural rate of unemployment.
a vertical line
The town of Franklin has an economy composed entirely of two equally sized specialized tire manufacturers. Both company X and company Z produce race car tires and airplane tires. Company X is better at producing race car tires than Company Z which is better at producing airplane tires. In order to maximize output, Company X should
abandon the production of airplane tires to fully specialize in the production of race car tires and then trade with Company Z for airplane tires.
Referring to a Keynesian Phillips curve, a reduction in inflation is likely to cause:
at least a slight increase in unemployment.
Which of the following does NOT qualify as "money"?
barter exchange
In a recessionary period of low economic output, a neoclassical economist would:
believe decreases in prices will eventually return the economy to potential output.
According to this graph, which age group will experience the greatest decline in population growth between 2000 and 2030?
between 20-64
What policy actions should the Fed take, acting from a Keynesian viewpoint, with inflation and unemployment is inversely related, to move up the Phillips Curve in a recessionary economy and decrease unemployment?
buy securities in the Open Market Operations (OMO)
An open market operation increases the money supply when the Federal Reserve
buys bonds from banks, which increases bank reserves.
When tasks involved with producing a good or service are divided among different workers, businesses
can produce a greater quantity of those goods or services.
If a debit card is used for a purchase it is like using
cash
The M2 money supply consists of everything in the M1 money supply, savings deposits and which of the following?
certificates of deposit
Which of the following terms is used to describe the set of policies that relate to government spending, taxation, and borrowing?
fiscal policies
When the central bank acts in a way that cause the money supply to increase while aggregate demand remains unchanged, it is
following an expansionary monetary policy
When the Central Bank acts in a way that causes the money supply to increase while aggregate demand remains unchanged, it is
following an expansionary monetary policy.
The experience of the 1970's led Keynesian economists to understand that when it comes to aggregate supply and stagflation, policy responses
had no good solution because using either an expansionary or contractionary policy lead to increasing either unemployment or inflation.
The M2 measure of the money supply is defined as currency
plus savings accounts and other timed deposits, CDs and money market funds, and is larger in sum than M1.
If all else remains constant and the values of two variables move in the same direction it indicates a
positive slope relationship.
Darryl is starting a company helping people put up and take down holiday lights on their homes. He determines that the larger the house, the more likely people are to use his company to put up their lights. If Darryl were to plot the relationship between home size and willingness to pay for holiday light installation services, the line on the graph would show a
positive slope.
Once an economic model is constructed around certain assumptions, it can be tested to determine its value in
predicting outcomes.
Which of the following descriptions is excluded from being a function of money?
price level, measurement of wealth, unit of scale
The Federal Reserve's monetary policy tools include all the following EXCEPT
printing money.
In 2010, Microsoft will pay corporate income tax to the federal government based on the company's ________.
profits
A tax that is a flat percentage of all wages earned is a
proportional tax
Quantitative easing undertaken after 2008 is different from traditional central bank intervention in that it focused on
purchasing long-term government securities to encourage long-term capital projects and ease mortgage conditions.
After reports of the subprime mortgage crisis began to appear in the media, which of the following most likely caused housing prices to fall?
rational expectaions
The proportion of deposits that banks are legally required to deposit with the central bank are called
reserve requirements.
A decrease in taxes will shift the AD curve to the ________, while a decrease in government expenditure will shift the curve to the ________.
right; left
When the supply of loanable funds shifts its position to the left, interest rates will ________ because loanable funds will be ________.
rise; more scare
Besides education, what other areas within its borders is a state responsible for funding?
roads, parks, police and fire protection, libraries
The main sources of state and local revenue include property tax,
sales tax, and federal government assistance.
If the Fed wants to decrease the quantity of money in the economy, it can
sell bonds.
An expansionary monetary policy increases investment and consumption spending, which
shifts the AD curve to the right and increases equilibrium GDP
An expansionary monetary policy increases investment and consumption spending, which
shifts the AD curve to the right and increases equilibrium GDP.
The ________ suggests a negative relationship between inflation and unemployment.
short-run Phillips curve
Society gains advantages through trade because of its ability to
specialize resources to the uses where opportunity cost is minimized.
Select the reason below that helps to stabilize the economy by effective policy making?
tax cuts that are permanent
If corporate income taxes increased from 23% to 28%, which of the following would be most impacted?
the Federal government budget
Congress' Economic Council recommends additional government spending to stimulate the aggregate demand. The council appears to follow
the Keynesian approach to fiscal policy.
The ________ shows the interaction between household and firms in the goods and services market as well as in the labor market. This simplifies a complex economy, enabling economists to better observe and understand behavior.
the circular flow diagram
In the case of an negative relationship between two variables, all else remaining constant
the value of the two variables will move in opposite directions from each other.
From the graph above, one could conclude that, all else remaining constant
there is a trade-off between X and Y.
A graph in the xy plane with a single point at 3 on the x (horizontal) axis and a vertical line upwards from that point to infinity would be represented by the equation
x=3
