Economics 202
an example of "investment" in computing real GDP using the expenditure approach is the purchase of
a new set of tools by an auto mechanic, for use in repairing cars
a change in the price of a good
does not shift the good's demand curve but does cause movement along it
net investment =
gross investment - depreciation
"the rich should pay higher income tax rates than the poor" is an example of a
normative statement
the governments budget deficit is the excess of government
purchases of goods and services over its net taxes
aggregate expenditures include all of the following except
purchases of intermediate goods
you decide to take a vacation and the trip costs you $2,000. While you are on vacation, you do not report to work where you could have earned $750. The opportunity of the vacation is
$2750
let C represent consumption expenditure, S saving, I gross private domestic investment, G government purchases of goods and services, and NX net exports of goods and services. Then GDP =
C+I+G+NX = GDP
which of the following would not shift the demand curve for turkey?
a change in the price of a turkey
what would decrease the the supply of popcorn?
a decrease in the number of popcorn suppliers
a positive statement is
about what is
when the quantity demanded equals quantity supplied
equilibrium
depreciation =
gross investment - net investment
The approach to GDP that sums compensation of employees, rental income, corporate profits, net interest, proprietors' income, depreciation, and indirect taxes and subtracts subsidies is the
income approach
Economics is the study of how people, businesses, governments and societies
make choices to cope with scarcity
in broad terms the difference between microeconomics and macroeconomics is that
microeconomics studies the decisions of individual people and firms and macroeconomics studies the entire national economy
if the price of a cd is equal to the equilibrium price, there will be a _____ of cd's and the price will _____.
neither a shortage nor surplus, not change
statements about what ought to be are called
normative statements
the law of demand implies that demand curves
slope down
if the price is above equilibrium price, then there is a
surplus, and market forces will operate to a lower price
the quantity demanded is
the amount of a good that consumers plan to purchase at a particular price
the opportunity cost of something you decide to get is
the highest valued alternative you give up to get it
A fall in the price of a good causes producers to reduce the quantity of the good they are willing to produce
the law of supply
an indirect tax is a tax paid by consumers
when they purchase goods and services