Test Review Econ

The United States Constitution states that

A law must be passed to approve spending for a government activity

A Decrease in input prices will cause

AD to increase (move to the right)

An Increase in Goverment spending will cause

AD to increase (move to the right)

An Increase In Taxes will cause

AD will decrease (move to the left)

For the Minimum Wage to Be relevant it must be

Above the equilibrium wage

Ceteris Paribus

All thinks held equal all other variables held constant

The purpose of fiscal policy is to

Alter the direction if the economy

Which of the Following would Economists label as an example of the "tragedy of the commons"

Anything that the public shares and gets taken away or destroyed because of misuse

Under the Sherman Anti Trust act it is illegal too

Attempt to become monopolist

Compared to Italy and Japan the debt as a percentage of GDP in the U.S is

Substantially smaller

The Clean Water Act Is

Succeeded in getting many boddies of water in the use to clean levels

Limiting Trade can be accomplished with

Tariff's, quotas,non tariff regulatory barriers

The First Central Bank Of the US was called

The First Bank of The U.S

A wage that is sufficient to keep a family out of poverty is called

The Living wage

A budget deficit is

The amount owed by which expenditures exceed revenues

THe Contesable Markets Hypothesis differs from the Requirements for Perfect Competition in that

The former requires many competitors

the reserve ratio is

The percentage of each dollar deposited in a checking account that a bank must maintain in a federal reserve branch

The law that governs most goverment regulation of monopolys

The sherman antitrust act

Rent Control countinues to survive despite its flaws because

Those displayed by the policy do not love in community and cannot vote to end it.

Those that lose from and increase in minnium wageare

Workers that are laid off

In comparison to perfect competition monopoly price quantity combinations generate

a consumer surplus that is smaller

Which of the Following would be described as the operational lag

a delay in getting a particular plan implemented with the money getting into peoples hands

An example of discretionary fiscal policy would be

a tax cut to stimulate consumption

Expansionary fiscal policy would result in

aggregate demand moving to the right

If a country can with a single unit of labor produce more of both clothing and computers than another country the the first atvantage the country has

an absolute advantage

Using Baseline Budgeting is

an increase in spending is compared to what would be needed to provide the same level of services in that year

Using Current Services Budgeting

an increase in spending is compared to what would be needed to provide the same level of services in that year

Many Economists look at the federal budget and see it should be broken into

an operating budget and a capital budget

Monopolies such as those created by copyrights and patents

are necessary to motivate innovation and authorship

In comparison to prefect competition, monopoly price quantity cobinations generate

as consumer surplus that is smaller

The Federal funds rate is the rate at witch

banks lend to one another to meet reserve requirements

If the Feds wished to deacrese interest rates using an open market operations it would

buy gold

Nobel Laureate economist Ronald Coase suggests that pollution problems could be solved

community property were owned by self interest parties

The interest rate effect, the real balance effect and the foreign purchases effect suggests that the aggregate demand curve is

downward sloping

After Accounting For externalities with a social cost curve, the new equilibrium would be such that

equilibrium price is lower than before and equilibrium quantity is lower than before

Public goods

everyone benefits even if they didn't pay for it

4 Sectors of the ecnomy

gov Sector foreign sector household sector firms sector

Open Market Operations refer to the buying and selling of

government debt

Gennrally Speaking, The last two years of a presidents term are

higher growth than the first two years

Which of the following would be described as the recognition lag

knowing there is a recession

The lowest Wage that may be legally paid for an hours work

minimum wage

The Fedreral Reserve governs US

monetary policy

which of the following are goals for monetary policy

monitoring corruptiona in the securities industry

A country that is limiting imports of good by stating that only a certain number may be imported is using

quotas

A tax on a good whose production causes pollution will

raise the equilibrium price and lower the equilibrium quantity

Montana is in ____Federal Reserve Circuit

the 9th

A budget surplus is

the amount by which revenues exceed expenditures

Eternalities

the effect that a priducer has on a consumer

Discretionary Fiscal Policy differs from non-discretionary policy fiscal in that

the former requires timely decisions whereas the latter is built into the system.

The aggregate supply- Aggregate demand diagram models

the interaction of producers and consumers for a particular good or service

When the Federal Reserve loans money to banks, the rate it charges banks with good credit is called

the primary credit rate

The reasons economists approve of limiting trade targets include

the protection of the enviroment

The Keynesian, Classical and Intermediate rages apply too

the shape of the aggregate supply curve

The concept of "clean enough" to an economist means

the state of cleanliness where the marginal cost of cleaning equals the marginal benefit of cleanin

The Pattern of the 1930's through the middle 1990's was

the total amount owed by the federal government

The national debt is

the total amount owed by the federal government

A nautral monopoly occurs when

there are fixed costs and continuously increasing marginal costs

A global enviromental problem is less easily solved than one confined to a single country because

there is no enforcement of enviromental reguations or taxes for a global problem

Economists refer to the problem that exists when the public propoerty is mistreated

tragedy of the commons

Which of the following environmental problems is too easily solved

waste water treatment

Crowding out is the idea that

when government spending is increased in one area it must be decreased in another.

Members of the Board Of Governors are appointed for

14 Years

The Board Of Governers of the Fedral Reserve system has ___members

7

The Fed has authority to set the reserve requirements. Current The reserve requirment is about

9%`

In the Figure Above How many people would be Unemployed at the minimum wage

Ls-Lmin

Transfer Payments

Medicare GI Bill

Logrolling occurs when

Members of the Congress trade votes to get their programs passed

In the Standard Oil Case the company owened every single part of the production prosses for G&O and was there fore called a

Nautral Monopoly

Pollution Is an example of a

Negative Externality

If a tenent controlled rent is above the equilibrium the result wull be

Nothing different than if there were no rent control

Determining the comparative advantage of a country requires that you look at the economic notion of

Opportunity costs

Households

Owners at the means at production

Firms

People that want the means of production

Falice compsomtion

Premise is true- conclusions is true Genral statements

An economist looks at rent controlled prices as and example of a

Price Ceiling

Economist generally believe that

Private incentives can be used to motivate individuals to act "green"

Micro

Production possibility curve- appendix la.

Rent control laws are typically establishged when

Rents are rising quickly

Factor Market

Sets up a market for means of production

The Largest Single Item in the Fed Budget is

Social Security

Factors Of production

Labor Capitol Land

Factors of Production

Labor Capitol Land Entrenship

Thos that lose from the imposition of rent control are

Landlords

M1 is the total amount of ____in the economy

Checking accounts,coin and paper currency

If with one unit of labor the u.s can produce 10 units of the computer software and 5 units of computer hardware and chinca can produce 3 units of software and 2 units of hardware then

China has a comparative advantage in the hardware and the u.s has a comparative advantage in software

Rent control is more prevelent in

Cities

Fiscal Policy is controlled by

Congress and the President

Suppose the Fed reserve wanted to fight inflation by increasing interest rates. Doing so would

Decrease aggregate demand

Macro

Economy as a whole

Generally, Economists believe that crowding out is

Important but less than complete;one extra dollar of government spending decreases private spending by a dollar

Between 1960 and 2004 the us net position with trade was that

Imports almost always exceed imports

LAws that change the tax code

In the House Of Representatives

The Point of open market operations is too

Increase or decrease the money supply si as ti influence rates

Economists genrally belive that increses in the minnimum wage will

Increase teen unemployment

In reaction to the recession of 2001, a tax cut was passed in which tax rebate checks were sent to millions of american families. This was intended too

Increase the Aggregate demand

The Percentage of the federal debt owned by trust funds has

Increased consistently over the past 20 years

The Clayton antitrust act made the following illegal

Interlocking directorships and price discrimanation

Standard Oil was broken into smaller Buisnesses by the courts because

It dominated every aspect of Oil and gasoline price's