econ 202

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If your grandparents buy a new retirement home, this transaction would affect

Investment

Percent increase in real GDP from 2012-2013

0 percent

What is the value of real GDP

1060

GDP Deflator

113

What is the value of nominal GDP

1200

Percent increase in prices from 2011-2012

13 percent

Approximate Percent increase from 2012-2013

22 percent

what was the rate of inflation over this period?

5.4 %

absolute advatage

Ability to use fewer resources

Market Failure

Allocation of goods and services is not efficient

Deadweight loss is greatest when

Both supply and demand are relatively elastic

ratio of nominal GDP to real GDP then multiplied by 100

GDP Deflator

Comparative advantage

Can produce good at lower opportunity cost

Absolute advantage

Can produce using fewer resources

A tax on gasoline is likely to

Cause a greater deadweight loss in the long run when compared to the short run

If cross price elasticity between two goods is negative, the two goods are likely to be

Complements

The reduction of tax

Could increase tax revenue if the tax had been extremely high

Productivity can be increased by?

Improving the education of workers

The Burden of tax falls more heavily on the sellers in a market when

Demand is elastic Supply is inelastic

The burden of tax falls more heavily on buyers in a market when

Demand is inelastic Supply is elastic

A tax collected from buyers generates a smaller deadweight loss than a tax collected from sellers

FALSE

An increase in the price of diamonds will have a greater impact on the CPI than an equal percentage increase in the price of food.

FALSE

In the United states, investment is the largest component of GDP

FALSE

Tariffs tend to benefit consumers

FALSE

The largest category in the CPI is medical care

FALSE

When we use the model supply and demand to analyze a tax collected from the buyers, we shift the demand curve upward by the size of the tax

FALSE

which of the following products would be least capable of producing an externality?

Food

The "Basket" on which the CPI is based is composed of

Products purchased by the typical consumer

If Nominal GDP in 2013 exceeds nominal GDP in 2012, then the production output must have

Risen or fallen because theres not enough information

If a tax is placed on a good in a market where the supply is perfectly inelastic, there is no deadweight loss and the sellers bear the entire burden of tax

TRUE

Landlord question

Tax falls on landlord

Difference between what the buyer pays and the seller recieves

Tax wedge

Which of the following about a binding price ceiling is true?

The shortage created by the price ceiling is greater in the long run than in the short run

which statement is normative

The unemployment rate should be lower

externality

When one persons actions have an impact on a bystander

Workers in the united states enjoy a high standard of living because...

Workers in the united states are highly productive

Inferior good

a good characterized by negative income elasticity

If consumers think that there are very few substitutes for a good, then

demand would tend to be inelastic

U.S. GDP would exclude which of the following

cotton purchased by Lee Jeans

If U.S. GDP exceeds U.S. GNP, then

foreigners are producing more in the united states than americans are producing in foreign countries

normative statement

prescription for how the world ought to be

supply of diamonds is inelastic. A tax on diamonds would generate a..

small deadweight loss, burden of tax would fall on sellers


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