chapter 9 and 10

Changing the level of government spending is an example of:

Fiscal policy.

Which of the following is a macroeconomics question rather than a microeconomics?

Is the national unemployment rate rising or falling?

If a country has a trade deficit, does it indicate that the country has a serious problem?

No.

Long run growth per capita is:

a sustained upward trend in the economy`s overall output per person.

Pollution has _____ and _____.

benefits; costs

The short run alternation between economic downturns and recessions, then economic upturns and expansions is known as the:

business cycle.

The marginal social benefit of pollution:

can be measured as the additional gain to society from one additional unit.

Fiscal policy attempts to affect the overall level of spending in the economy by making changes in:

changes in tax policy or government spending.

An overall decrease in the price level is called:

deflation.

The modern tools of macroeconomics policy are:

fiscal policy and monetary policy.

John Maynard Keynes believed that the:

government should actively try to mitigate the effects of recessions by using fiscal policy.

Fiscal policy involves changes in:

government spending.

If a country runs are trade deficit, its investment spending is probably:

greater than its level of saving.

The paradox of thrift highlights:

how individual decisions to save your money may worsen a recession.

The topics studied in macroeconomics include:

inflation, unemployment, and economic growth.

Monetary policy attempts to affect the overall level of spending in the economy by making changes in:

interest rates.

Inflation:

is an increase in the overall level of prices.

Recessions are periods when:

output and employment are falling.

An expansion is a period in which:

output rises.

Macroeconomics is the study of the:

overall behavior of the economy.

The sequence of business cycles:

peak, recession, trough, expansion.

Periods in which output and employment are falling are know as:

recessions.

A depression occurs when:

the economic downturn becomes extremely deep and prolonged.

The socially optimal amount of pollution occurs where:

the marginal social benefit of pollution is equal to the marginal social cost.

Long run growth is:

the sustained upward trend in the economy`s output over time.

A market economy will produce _______ without any government regulations.

too much pollution

An open economy is an economy that:

trades goods and services with other countries.

The point in the business cycle at which a recession ends and the expansion begins is:

trough.

A trade surplus occurs:

when the value of goods and services a country imports is less than those that they export.