Econ Final
28) Which of the following is NOT an autonomous expenditure in the aggregate expenditures model?
) imports
23) Aggregate demand is the relationship between the quantity of real GDP demanded and the ________.
) price level
33) If the price level is constant and the slope of the AE curve is 0.75, a decrease in government expenditures of $100 leads to a decrease in real GDP of
400
In a diagram with the consumption function, the ________ shows all points where disposable income equals consumption expenditures.
45-degree line
suppose bank a holds 200 reserves has deposits of 1000 and the desired reserve ratio is 15 percent ralph bank has excess reserves of
50
if the nominal interest rate is 7 percent and the inflation rate is 1 percent the real interest rate is approx
6
in an economy of 40 million people are employed, 2 million are unemployed and 8 million are not in the labor force
84
in an economy of 43 million people are employed, 3 million are unemployed and 4 million are not in the labor foce. what is the employment to population ratio
86
suppose china airlines wants to purchase a french airbus the price of the airbus is 95 million euro. if the exchange rate is 1 euro per 10 yuan the price of this airplane to china air lines is
950
41) In the short-run, real GDP can be greater than or less than potential GDP because in the short run the
D) money wage rate is fixed.
34) According to purchasing power parity, a rise in inflation in the United States. relative to the rest of the world will lead to
an exchange rate depreciation
joe likes to sleep late in the mornings and play tennis in the afternoons. the opportunity cost of joe attending his morning class for one hour
an hour of sleep given up
what will lead to an appreciation of the us dollar against british pound
an increase in brisstisd demand for imports form us
in 2015 the price of peanuts was rising which led to peanut butter buyers to expect the price of peanut butter would rise in the future. Consequently in the current market for peanut butter there was a _______ which resulted in ______ in the price of peanut butter and ____ in the quantity of peanut butter
an increase in demand for peanut butter an increase an increase
when the fed lowers the federal funds rate it can lead to
an increase in lending by banks
16) Which of the following increases aggregate demand?
an increase in the quantity of money
an increase in british demand for imports from the us
an incresae in british demand for imports from the us
last year the exchange rate between us dollars and median peso was 10 peso per dollar. today is it 11 peso per dollar here the dollar __________against the peso and the peso ______ against the dollar
appreciated depreciated
the demand curve for us dollars slopes downward becasue as the dollar _____ us goods become ___ expensive to foreign residents so they purchase fewer us goods an the quantity of dollars demanded decreases
appreciates m more
checks are to money because
are merely instructions to transfer money
discourage workers ____ counted as officially unemployed because they _____
are not are not actively seeking work
The study of economics
arises from the fact that our wants exceed available resources
in short run when the fed increases quantity of money
bond prices rise and the interest rate falls
36) Suppose the Fed wants to fix the U.S. dollar/Mexican peso rate at 11 pesos per dollar under a fixed exchange rate policy. If the exchange rate falls to 10 pesos per dollar, the Fed can
buy dollars.
human resources that perform the functions of organizing managing and assembling the other resources are called
entrepreneurship
the opportunity cost of good a in terms of good b is
equal to ration of the money price of good a to the money price of b
if the inflation rate is negative the price level in an economy is
falling
suppose that a bond promises to pay its holder 100 a year forever if the price of the bond increases from 1000 to 1250 then the interest rate on the bond
falls from 10 percent to 8 percent
which part of the federal reserve system meets every 6 weeks to determine the nations monetary policy
fedreal open market committte
A GDP is defined as the market value of all ____ in a given time period
final goods and services produced in a country
The fact that people with higher incomes get to consume more goods and services address the _____ part of one of the two big economic question
for whom
if foreigners spend more on us made goods and services than we spend on theirs
foreigners must borrow from the us or sell us assets to make up the difference
a recent accounting graduate from a major business school is searching for a place to begin his career as an accountant. this individual is best considered as
frictionally unemployed
expenditure that is an intermediate good
general motorrs buys new tires to put on the cars in its building
25) The U.S. fiscal policy implemented in 2008 was an attempt to
give billions of dollars to businesses and low- and middle-income Americans in order to stimulate business investment and consumption expenditure, and thereby increasing AD.
the richardo barro effect says that
government budget deficits have no crowding out effect because of taxpayers increase their savings to match the quantity of loanable funds demand by the government
the crowding out effect refers to
government investment crowding out private investment
the lower exchange rate to day ceteris paribus the
greater is the expected profit from buying us dollars today and holding them
net investmet equals
gross investment-depreciation
what will increase labor productivity
growth in capital per hour of labor technological change
in developing nations micro loans
have enabled small businesses with limited access to credit to purchase capital and expand thus allowing greater economic growth
when a government has a budget surplus the surplus
helps finance the investment
in the absence of the ricardo bra effect an increase in the government deficit results in a _____ real interest rate and a ___ equilibrium quantity of investment
higher lower
the circular flow diagram indicated that
households sell the services of factor of production to firms
moving along the aggregate production function all of what is held constant
human capital technology capital
a key factor that leads to economic growth is
human capital accumulation
if an economy has a velocity of circulation of 3 then
in a year the average dollar is exchanged 3 times to purchase goods and services in GDP
Potential GDP per labor hour can increase due to
inces in labor productivity
an increase in the demand for computers and a decrease in the number of sellers of computers will defiantly _________
increase the price of a computer
as a county that has a bowed out production possibilities frontier produces more of one good, the opportunity cost of a unit of that good
increases
if both the demand and supply increase the equilibrium quantity _____ and the equilibrium price ____
increases might rise, fall, or not change
If frito lay an american snack company opens a new manufacturing facility in mexico and produces snacks which are distributed in south america hen medicos GDP ____ and Us gdp ______
increases a doesn't change
the quantity of real money demanded is
independent of the price lebel
the presence of _____ creates a difference in the value between the market price and the factor cost of a product
indirect taxes and subsideies
which of the following best defines capital as a factor of production
instruments machines builidings used in the production process
26) When aggregate planned expenditure is less than real GDP, unplanned
investment occurs.
two reasons why valuing goods at they market prices is different than valuing them at their favor cost include
irdirect taxes and subsides
the required reserve ratio
is the fraction of a banks total deposits that is required to be held in reserves
the natural unemployment rate
is the unemploment at full employment
a higher savings rate that leads to an increase in the capital stock
leads to increases in labor productivity
due to the recession in 2008 firms decreased their profit expectations as a result there was a ______ shift in the ______ loanable funds curve
leftward demand for
the branch of economics that deals with the analysis of the whole economy
macroeconomics
macroeconomics differs from microeconomics in that
macroeconomics focuses on the nation economy and global economy
facilitate trade coordinates price information between buyers and sellers allow traders to enjoy gains from trade
markets
the most direct way in which money elimainates the need for double coincidence of wats is through its use as a
medium of exchange
the study of the decisions of individuals units in the economy is known as
micreconomics
investment is financed by
national saving borrowing from he rest of the world
a nations investment must be financed by
national saving plus borrowing form the rest of the world
in a market at the equilibrium price
neither buyers nor seller can do business a a better price
if the economy capital stock increases over time
net investment is positive
describes an individual who is cycle unemplyed
nicholas was laid off when orders for general motors cars fell during a recession
The main reason why the united states has a trade deficit with china is because chinas trade practices are unfair
normative statement
full time students and prisoners are
not in the labor force
if the money price of wheat increases an no other prices change the
opportunity cost
when the government hires people to serve in the army these people are no longer availible to do other work. this choice illustrates the concept
opportunity cost
the bias in the CPI typical
overstates inflation
as the real interest rate increases
people increase the quantity they say
the unemployment rate is the ____ who are unemployed
percentage of people in the labor force
factors that influence labor productivity include _____
physical capital human capital technology
classical growth theory argues that when real GDp per person rises above the subsistence level
population growth increases driving real GDP per person back to subsistence level
An increase in tuition means fewer students will apply to college
posititive statment
15) The SAS curve shifts if there is a change in
potential GDP
If CPI is 120 this means that
price are 20 percent higher than in the reference base period
In july 2014 the CPI inflation rate was .3 percent while the core CPI inflation rate was .1 percent. the difference between theses two measurements of inflation indicates
prices for food fuel were increasing more rapidly than prices for other goods
what is included int eh supply of loanable funds
private saving government budget surplus international borrowing
the quantity supplied of a good or service is the amount that
producers plan to sell during a given time period at a given price
The social arrangement that gives john grishma the writer of the best selling novels, the ownership of his novel is
property rights
components of the expenditure approach to measuring us gdp
purchases of food made by families purchases of us made movies purchases of new homes by familys
If the price level falls by 5 percent and workers money wage rates remain constant firms quantity of labor
quantity of labor will increase
In the labor market an increase in labor productivity ___ the real wage rate and ____ the level of employment
raises increases
if the economy is at full employment
real gdp equals potential gdp
what is used to calculate the standard of living
real gdp/population
One of the opportunity cost of economic growth is
reduced current consumption
the curvature of the producitonfunctuon shows that as employment increase the productive of labor
remains positive but decreases
an increase in the working age population results in a
rightward shift of the supply of labor curve and increase in potential GDP
when the nominal interest rate rises the opportunity cost of holding money
rises and people hold less
the fed buys 100 million of government securities from bank a. what is the effect on the federal reserves balance sheet
securities increased by 100 million and reserves of bank a increase by 100 million
the circular flow shows that the household sector earns its income by
selling factors of production
After hurricane Katrina devastated parts of mississippi and new orleans in 2005 we can be sure that the production possibilities frontier for that area temporariliy
shifted inward toward the origin
if new capital increases labor productivity the supply of labor ____ and the demand for labor _____
stays the same increases
suppose the country of tiny decided to open its borders to free trade. as a result a number of its workers lost their jobs to international completion and can't find new jobs because their skills don't match what is required for job openings. The workers who lost their jobs and searched for new ones ar best be considered part of
structional employment
wages for workers producing iPods and similar products will rise next year. walkman watch ask you to predict the effect of this change in next years market for iPods. Yuou credit that the major effect will be that the
supply curve for an iPod will shift leftward
the demand for mexican tomatoes by american food grocer chains creates a
supply of us dollars
if the quantity supplied exceeds the quantity demanded there is a
surplus and the price is above the equilibrium
substituion bias in the CPI refers to the fact that the CPI
takes no account of the substitution of goods by consumers when relative prices change
what is a major influence on the expected profit from an investment
technology advances
After you graduate you have decided to accept a position working at the bureau of labor statistics for 45,000 a year. the two other offers you received were working for walmart for 38000 and working for east and young consulting for 42000. Of these two offered you would have preferred the job at earns and young. What opportunity cost of accepting the position at the bureau of labor statistics
the 42000 you would d have been paid working for ernst and young
The slope of the saving function is equal to
the MPS.
An increase in the quantity of capital increases ________ and increase in the full-employment quantity of labor increases ________.
the SAS and the LAS; the SAS and the LAS
9) If the money prices of resources changes
the SAS curve shifts.
40) If the People's Bank of China adopted a flexible exchange rate policy
the U.S. dollar would depreciate.
If the People's Bank of China adopted a flexible exchange rate policy
the U.S. dollar would depreciate.
commercial bank reserves refers to
the cash in its vaults an its deists at the federal reserce
airbus is a european jet air line producer. indian airlines wants to but 23 airbus places from airbus due to increased demand for world to travel. as a result
the demand cure for european euros and the supply for indian rupees both shift rightward
if the federal reserve increases interest rates
the demand curve for us dollars shifts rightward and the supply curve of us dollars shift leftward
when the price of a pizza decreases from 14 to 12
the income effect points out that total purching power of people who buy pizza increases
potential gdp is
the maximum amount of gap that can be produced while avoiding shortages of labor capital land and entrepreneurship that would bring rising inflation
suppose that the unemployment rate equals 4.5 percent and that the natural unemployment rate rate is 5.5 percent. we can conclude that
the output gap is positive
according to the quantity theory of money in the long run an increase in the quantity of money results in an equal percentage increase in `
the price level
the statement that ____ is a positive statement
the price of sugar in the united states is higher than the price in Australia
ex of gross private domes investment component of gdp
the purchase of production machinery by IBM an increase in the finished goods invetory
Suppose the money wage rate and the price level both fall by 5 percent. as a result
the quality of labor demanded does not change because there is no change in the real wage
if the price of a hot dog is 2 and the price of a hamburger is 4 then
the relative price of a hot dog is 1/2 of a hamburger per hot dog
apples are a normal so if the price of an apple increases from 50 cents to 60 cents, the quantity of apples demanded decrease because of
the substitution an income effects
Intermediate goods are excluded form GDP because
their inclusion would involve doouble counting
reported gap increases when in fact total production is unchanged when
there is a shift from household production to market production a previously illegal activity is legalized
full employment means that
there is no cyclical unemployment
if the real interest rate increases from 3 to 5 percent
there will be a movement up along the dead for loanable funds
macroeconomics topics include
total national wide employment
in the computation of gap social security payments count as
transfer payments and are not included in gdp
glann a student who just graduated from college last week and is currently looking for job
unemployed
the consumer price index is a measure of the average of the prices paid by _____ for a fixed basket of consumer goods and services
urban consumers
if ford sells 200 explorers for a total of 400,000 to germany, while the us imports a 100 bmw for a total of 500000 from germany
us gdp decreases because net exports are negative
real gdp measure
value of total production linked to prices of a single year
when a country decides to produce fewer bombers and more public housing projects, it is answering the ____ part of one of the two big economic question
what
if you lend a dollar and at the end of the year the price level rose by 10 percent
you must have earned a nominal interest rate of 10 percent to maintain the purchasing power of your loan
what policy action could speed productivity growth
-tax incentives to encourage saving -encouraging international trade -directing public funds toward financing basic research
At the beginning of the year toms tubes had a capital stock of 5 tube inflating machines. during the year tom scrapped 2 old machines and purchased 3 new machines. what was his net investment
1 machine
Angie can produce either 1 uni of x or of y in an hour while benda can produce either 2 units of x or 4 units of y nan hour. there can be gains of exchange from
1 unit of x per unit of y for ages and 1/2 unit of x per unit of y for brenda
this year [izza hut makes a total investment of 1.3 billion in new stores. its depreciation in this year is 300 million. pizza huts gross investment is ___ and its net investment is ______
1.3 billion 1.0 billion
Suppose that in an hour joe can prepare 10 sandwiches or 5 pizzas. the opportunity cost of joe producing one sandwich is
1/2 pizza
based on the following data the country of tiny town the unemployment rate equals populaiton-- 100 labor force--80 number employed--70 discouraged workers--5
10/80 x100
last year in the country of n imports equaled exports. n gdp was 500 million its consumer expenditure was 380 million and its invesment was 20 million. n government expenditure on goods and services were
100 million
if the number of people unemployed 100 the number of people employed is 1000 and the working age population is 1400 tenth labor force is
1100
during 2014 the outcry of economics had a real gdp of 115 billion n the population was .9 billion. in 2013 real gap was 105 billion and the population was .85 billion . in 2014 real gdp per person was
128
suppose a country is producing 20 million of real god if the economy grows at 10 percent per year approximately how many years will to take for real gdp to grow to 80 milliion
14
Jen had an exam score of 50 % points. There is an extra credit assignment that Jen can complete that will raise his exa score by 20. Jess has determined that the extra credit assignment will take 10 hours of is time. Jen will complete the assignment if he values the
20 points more then the 10 hours
In January time into owned machines valuded at 1 million. during the year the market value of the equipment fell by 30 percent. during 2015 Tim spend 200,000 on new machines. During 2015 times gross investment totaled
200,000
if the basket of goods and services used to calculate the CPI cost of 200 in the reference base period and 450 in a later year, the CPI for the latter year equals
225
the quantity of money in an economy is 9 million and the velocity of circulation is 3. nominal GDP in this economy is
27 million
the price of a bag of corn chips is 3 and the price of a bottle of soda is 1. what is the relative price of a bag of corn chips
3 bottles of soda per bag of corn chips
during 2013 the country of economy ha a real gdp of 115 billion and the population was .9 billion. in 2012 real gdp was 105 billion and population was .85. Economics growth rate per person is
3.44
if real GDP is 13000 billion and aggregate hours are 20 million labor productivity is _____
40 dollars per hour
) When disposable income equals $800 billion, planned consumption expenditure equals $600 billion, and when disposable income equals $1,000 billion, planned consumption expenditure equals $640 billion. What is planned saving when disposable income is $800 billion?
A) $200 billion
If the price level in the U.S. is 120, the price level in South Africa is 140, and the nominal exchange rate is 7 South African rands per dollar, then the real exchange rate is
A) 6 South African goods per U.S. good.
1) Which of the following occurs while moving along a short-run aggregate supply curve?
A) The price level changes and the money wage rate is constant.
suppose a deposit in New York earns 6 percent a year and a deposit in London earns 4 percent a year. Interest rate parity holds if the
A) U.S. dollar depreciates by 2 percent a year.
14) The MPC is the fraction of
A) a change in disposable income that is consumed.
A) a change in the money wage rate B) a change in the price level
A) a change in the money wage rate --a reduction in the price of a raw material --technological progress
29) An increase in government expenditure on goods and services
A) increases aggregate demand.
24) The intertemporal substitution effect of the price level on aggregate demand
A) is one reason that the aggregate demand curve has a negative slope.
31) If the marginal propensity to import increases, then the
A) multiplier will decrease in value.
42) Arbitrage in the foreign exchange market, international loans markets, and goods markets results in
A) purchasing power parity, interest rate parity and law of one price.
39) In the short run, an increase in aggregate demand
A) raises the price level and increases real GDP.
6) When disposable income equals consumption expenditure, then
A) saving is zero.
49) A classical economist believes that
A) the economy is self-regulating and always at full employment.
37) When an increase in aggregate demand exceeds the increase in aggregate supply
A) the economy will experience inflation as the price level rises.
45) A country's balance of payments accounts records
A) the international trading, borrowing, and lending positions of a country over a period of time.
22) A change in imports caused by rising U.S. incomes is
B) a change in induced expenditure.
20) An increase in U.S. exports because of increasing foreign incomes represents ________ in the United States.
B) an increase in autonomous expenditure
A small country is an international borrower and its domestic supply of loanable funds increases. Consequently, the equilibrium quantity of loanable funds used in the country ________ and the country's international borrowing __
B) does not change; decreases
30) The AD curve slopes
B) downward due to the wealth and substitution effects.
13) The SAS curve and the LAS curve
B) intersect at potential GDP.
7) Real GDP
B) is equal to aggregate income.
The quantity of real GDP demanded equals $16.2 trillion when the price level is 90. If the price level rises to 95, the quantity of real GDP demanded equals
B) less than $16.2 trillion.
28) If you have $1,000 of money in the bank and the price level rises by 5 percent, your
B) money is worth less in terms of what it can purchase.
46) Which school of thought believes that real GDP always equals potential GDP?
B) only classical
33) In the short-run macroeconomic equilibrium
B) real GDP and the price level are determined by short-run aggregate supply and aggregate demand.
All of the following shift the short-run aggregate supply curve
B) technological progress. - a change in the money wage rate -a reduction in the price of a raw material
51) A monetarist economist believes that
B) the economy is self-regulating and will normally, though not always, operate at full employment if monetary policy is not erratic.
14) The supply of real GDP is a function of
B) the quantities of labor, capital and the state of technology.
Misty has the option of purchasing gone of three products. Brand A, B, or C. Each Cost 10 dollars. If she decides that brand A meets her needs best, then the opportunity cost of this decisions
Brand B or C depending on which is considered the highest value alternative forgone
20) If higher inflation is expected in the future, then the
C) AD curve shifts rightward.
29) When real GDP exceeds aggregate planned expenditure
C) GDP will decrease.
10) If the full-employment quantity of labor increases, then the
C) SAS curve shifts rightward and the LAS curve shifts rightward.
32) Which of the following does NOT occur as the economy moves from an expansion to a recession?
C) The change in planned spending exceeds the change in real GDP.
1) The consumption function shows how much
C) all households plan to consume at each level of real disposable income.
shift the short-run aggregate supply curve?
C) an increase in technology D) an increase in the quantity of capital -an increase in the money wage rate
38) When real GDP exceeds potential GDP, then the economy has
C) an inflationary gap.
2) If the marginal propensity to consume is 0.8, every $10 increase in disposable income increases
C) consumption expenditure by $8.00.
26) The AD curve shows the sum of
C) consumption expenditure, investment, government expenditures on goods and services, and net exports.
49) If the world real interest rate falls, then a country that is an international lender
C) decreases the amount of its lending.
11) According to the Keynesian theory, the typical firm
C) does not change its prices immediately when aggregate demand fluctuates.
37) If the Fed wants to depreciate the dollar against the yen, the Fed will
C) increase the supply of dollars by buying yen.
54) ________ economists believe that the economy is self-regulating and always at full employment.
Classical
7) An aggregate supply curve depicts the relationship between
D) the price level and the quantity of real GDP supplied.
18) Read the two statements below and indicate if they are true or false. I. Autonomous expenditures change when GDP changes. II. Aggregate planned expenditure is the sum of planned consumption expenditure, investment, government expenditure, and net exports.
D) I is false and II is true.
13) The MPS equals the ratio of
D) None of the above answers is correct.
21) Which of the following events shifts the aggregate demand curve leftward?
D) a decrease in government expenditures on goods and services
18) According to the intertemporal substitution effect, a higher price level
D) decreases the quantity of real GDP demanded.
25) All else being constant, autonomous expenditure
D) does not change with changes in real GDP.
A small country is an international lender and its domestic supply of loanable funds increases. Consequently, the equilibrium quantity of loanable funds used in the country ________ and the country's international lending ____
D) does not change; increases
17) The aggregate demand curve shows that, if other factors are held constant, a
D) higher price level results in a decrease in the quantity of real GDP demanded.
48) A Keynesian economist believes that
D) if the economy was left alone, it would rarely operate at full employment.
40) In a short-run macroeconomic equilibrium, potential GDP exceeds real GDP. If aggregate demand does not change, then the
D) short-run aggregate supply curve will shift rightward as the money wage rate falls.
12) The short-run aggregate supply curve
D) shows the relationship between aggregate production and the price level holding constant potential GDP and all resource prices.
8) If firms set prices and then keep them fixed for a period of time, their fixed prices imply that
D) the aggregate price level is fixed and that aggregate demand determines the quantity of goods and services sold.
Marginal benefit cures slope
downward, but not because of increasing opportunity cost
53) What could Keynes have meant by his now famous statement, "in the long run we are all dead?"
Government intervention in the economy is necessary in times of recession because an economy rarely restores itself to full- employment.
10) The components of aggregate expenditure include
I. imports. II. consumption.
34) Changes in which of the following will affect the size of the multiplier?
I. marginal propensity to import II. marginal propensity to consume III. marginal income tax rate
aggregate income, aggregate expenditure and GDP are
all equal
50) ________ economists believe that active help from fiscal and monetary policy is needed to insure that the economy is operating at full employment.
Keynesian
47) In 2009, just after taking office, President Obama approved an $800 billion stimulus package of tax cuts and increased government spending to combat the recession brought on by the financial crisis of 2007. Which group of economists most approved of President Obama's actions?
Keynesian economists
52) Which school of thought believes that recessions are the result of inappropriate monetary policy?
Monetarist
3) If the money wage rate rises, then the
SAS curve shifts leftward.
Positive statements
They described what is believed about how the world appears They can be tested as to their accuracy
Missouri can produce 10,000 tons of pecans per year or 5,000 tons of pears per year. Washington can produce 12,000 tons of pecans per year or 48,000 tons of pears per year. Which of the following statements would be true
Washinton has an absolute advantage in the production of both pecans and pears
one of the largest categories of exports form the us is now pop culture : movies music tv and videoss a direct conclusion from this is that compared to other counties the us has
a comparative advantage in producing pop culture
when part of the quantity of money is held in currency then
a currency drain occurs
always lowers the equilibrium price
a deaceease in demand combined with an increase in supply
what will shift supply left
a decrease in disposable income
a common definition of a recession is a time with
a decrease in real gap for two or more excessive quarters
If a nation's central bank increased domestic interest rates, the nation's exchange rate would change if the country's exchange rate was a
a flexible exchange rate.
an increase in a nations population results in
a movement along the nations production function
an advance in technology that increases productivity and an increase in the working age population results in
a rightward shift of the labor demand curve and of the labor supply curve
Examples of Factor of production and one that NOT
a univeristy teacher mineral resources an apartment building100 NOT 100 shares of microsoft stock
when the fed is _____ if is ______
adjusting the amount of money circulation conducting monetary policy
Neoclassical growth theory predicts that
advances in technology increase the productivity of capital which leads to an increase join investment and rising real GDP per person
suppose Misto bank expects the exchange rate to be 125 yen per us dollar at the end of the year. if todays exchange rate is 120 yen per us dollar Misto bank
buys us dollars today because it expects profit from buying us dollars and holding them
to produce a bushel of wheat farmer john must give up 2 bushels of corn where as farmer ben must give up 3 bushels of corn
comparitive advantage
goods that are produced this year stored in inventories and then sold to consumers next yeear
count as this years gdp
41) Which of the following exchange rate policies uses a target exchange rate, but allows the target to change?
crawling peg
increase in currency drain
deacreases the size of the money multiplier
Making a choice at the margin means
deciding to do a little bit more or a little bit less of an activity
a reccession occurs and peoples incomes decrease. knowing that an iPad is a normal good you predict that the demand fro an
decreases
the law of demand concludes that a rise in the price of a golf ball ____ the quantity demanded and ________
decreases creats a movement up along the demand curve for golf balls
if both the demand and supply decrease the equilibrium unity _____ and the equilibrium price ____
decreases might rise, fall, or not change
Suppose that the government is trying to decide between allocating its resources to build more dams or to build more free ways. in terms of forgone dams as more freeways are constrced the marginal benefit of additional freeways ____ and the marginal cost of additional freeways _____
decreases increases
a decrease in the demand for loanable funds and a leftward shift of the demand for loanable funds curve results from
decreases in the expected profit
43) Suppose the economy was initially in a long-run equilibrium. Then the world economy expands so that foreign incomes rise. U.S. aggregate demand ________ and eventually the money wage rate ________.
decreases; rises
when people who are holding the money of some other country want to exchange it for us dollars they _______ us dollars and ____ that other countries money
demand supply
when a good is imported into the us a ____ is created
demand for foreign currencies and a supply of dollars
the equilibrium price is the price at which the quantity
demanded equals the quantity supplied
Suppose a British bank offers a 3 percent interest rate while a U.S. bank offers a 7 percent interest rate. People must expect the U.S. dollar will
depreciate 10 percent.
4) In the very short term, planned investment ________ when GDP changes and planned consumption expenditure ________ when GDP changes.
does not change; changes
