Macroeconomics Final

supports programs that do not get determined annually but instead are set in law.

Mandatory spending is spending that

spending on physical capital

Investment refers to:

an inefficient outcome

Market failure occurs when market forces lead to

marginal costs of adjusting prices.

Menu costs are the:

above the supply curve and below the price

On a market graph producer surplus is the area that is

lead to price and quantity to move in the same direction

Shifts in demand

are incurred in the past and cannot be reversed

Sunk Cost are cost that:

It is government-provided financial funding to households to compensate for bad outcomes such as unemployment, illness, disability, or outliving their savings.

What is social insurance?

to ensure maximum employment while maintaining stable prices

What is the Federal Reserve's mandate?

Microeconomics is the study of individual decisions in specific markets, whereas macroeconomics is the study of the economy as a whole.

What is the difference between microeconomics and macroeconomics?

an inport

When a U.S. consumer buys Canadian maple syrup at the grocery store, this purchase is:

task is assigned to the worker with the lowest opportunity cost for performing the task.

When a manager uses comparative advantage to assign tasks in a workplace, then each

Shortage

When quantity demanded exceeds quantity supplied, _____ exists.

Social Security

Which of the following is a social insurance program in the United States?

Abundant inputs

Which of the following is a source of comparative advantage?

Marios builds a new house.

Which of the following is an investment?

You eat at a fancy restaurant for Valentine's Day.

Which of the scenarios represents consumption spending?

The Opportunity cost principle

Which principle tells you that the true cost of something is the next best alternative you have to give up to get it

equilibrium real interest rate.

Equilibrium in the loanable funds market determines the:

the economic status of children is independent of the economic status of their parents.

Intergenerational mobility is the extent to which:

finished and ready for the final user

A "final" good or service is one that is:

giving you a particular interest return on your savings and then loaning out the same money at a higher rate of interest.

A bank can make money by:

subsidizing secondary school education.

A government can promote the development of human capital by:

Setting that brings together potential buyers and sellers

A market is a

the economic surplus at the efficient quantity minus the economic surplus at the actual quantity.

A market's deadweight loss is calculated as:

buys a portfolio of stocks and bonds on your behalf.

A mutual fund is a fund that:

a method through which inputs can be turned into outputs, given the available resources.

A production function is:

A tax on imported products

A tariff is a:

an extra cost incurred as a result of buying or selling a good abroad rather than domestically.

A trade cost is:

quantity supplied equals the quantity demanded

An equilibrium price is a price where the

a specific product.

An excise tax is a tax on:

first sells stock directly to the public.

An initial public offering occurs when a company:

working but whose skills are not fully utilized.

An underemployed person is one who is:

normative

Analysis based on value judgments is called _____ analysis.

Rusia because she has a lower opportunity cost.

Barlow and Rusia own a nail salon. A manicure takes Barlow 60 minutes to complete and takes Rusia 45 minutes to complete. Completing a pedicure takes Barlow 45 minutes and takes Rusia 30 minutes. Who has a comparative advantage in pedicures?

specialize and trade

Comparative advantage explains why people

provides information about the future course of monetary policy in order to influence expectations about future interest rates.

Forward guidance occurs when the Federal Reserve:

amount of money that people can borrow.

Credit constraints limit the:

decline in capital due to wear and tear, obsolescence, accidental damage, and aging.

Deprecation refers to the

is when buying an additional item yields a smaller marginal benefit than the previous item.

Diminishing Marginal Benefit

is appropriated by Congress annually.

Discretionary spending is spending that:

substitutes-in-production

Due to a decline in demand and popularity, Ford Motor Company is planning to phase out traditional sedans such as 'Fusion' and 'Taurus' to focus on SUVs and trucks. Ford's sedans and trucks/SUVs are

investment

Enforceable property rights encourage economic growth by encouraging

due to the time it takes for employers to search for workers and for workers to search for jobs.

Frictional unemployment is unemployment:

amount that your money will grow into by a future date as a result of earning interest.

Future value is the:

market value of all final goods and services produced within a country in a given year.

GDP is defined as the

Normal Goods

Holding all else constant, if people eat out more at expensive restaurants when they earn more, then expensive restaurant meals are

Monetary policy adjusts interest rates, whereas fiscal policy adjusts government spending and taxes.

How is monetary policy different from fiscal policy?

workers skills and knowledge

Human capital refers to:

quantity supplied of jet fuel increases

If the price of jet fuel rises the

social insurance

In Canada, all the provinces provide health care to all citizens and permanent residents. This is an example of:

above price and below the demand curve

In a market graph, consumer surplus is the area:

substitution bias.

Suppose that a CPI basket includes avocadoes, pineapples and oranges. Avocadoes become very expensive, and consumers substitute away from avocadoes and buy hummus instead. If the CPI basket does not change to reflect the move away from avocados, the result is:

current dollar value of that good or service.

The "market value" of a good or service refers to the:

Benefits are greater than the cost

The Cost Benefit principle states that a decision should be pursued only if the

the positive relationship between price and quantity supplied.

The Law of supply refers to

price that businesses pay over time for the inputs used in the production process.

The Producer Price Index is an index that tracks the:

Marginal Principle

The _______ suggest decisions about quantities are the best made incrementally

Y = f(L, H, K).

The aggregate production function is represented as:

Fairness

The concept of equity focuses on

average price that consumers pay over time for a representative basket of goods and services.

The consumer price index is an index that tracks the:

nominal interest rate that banks pay on overnight interbank loans.

The federal funds rate is the:

percentage of the working age population that is either employed or unemployed.

The labor force participation rate is the:

the inverse relationship between price and quantity demanded.

The law of demand refers to:

when one input is held constant, while other inputs are increased, eventually output will increase by smaller and smaller amounts.

The law of diminishing returns states that:

ability to quickly and easily convert the asset to cash, with little or no loss in value.

The liquidity of an asset is defined as the:

funds used to buy, rent, or build capital.

The loanable funds market is the market for:

is the one who is the best at task

The person who has an absolute advantage in a task

Interdependence

The principle that your best choice depends on your other choices, the choices others make, developments in other markets, and expectations about the future is known as the _____ principle.

marginal propensity to consume.

The slope of the consumption function is the:

$200.33 billion.

The table contains information about Pfizer's stock. How much is Pfizer, as a company, worth?

stock market, the bond market, and the banks.

The three major pillars of the financial sector are the:

age 16 or older who are not in the military or institutionalized.

The working age population includes people who are:

focus on the task in which they have a comparative advantage.

To maximize production, people should

It is the amount of an item that a seller is willing to sell at a particular price.

What is quantity supplied?

on average, prices went down across the economy.

f you see that the consumer price index this year is lower than the consumer price index last year, this means that:

human capital

he U.S. Department of Education sponsors the i3 program (Investing in Innovation), which provides grants to educational institutions and schools that have a proven track record of high student achievement. This is an example of a government program designed to build: