Econ: Unit 7 Econ Measures Review

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During the 1930s, the United States experienced

a depression

checking account

account from which deposited funds can be withdrawn at any time by writing a check

depression

major slowdown of economic activity

consumer price index (CPI)

measure of the change in price over time of a specific group of goods and services purchased by households

Which consumer category in the table experienced the greatest inflation between 2003 and 2005?

medical

The index for all economic indexes in the base year is __________.

100

What label should replace the question mark in the graph?

Net Domestic Product

Which of the following is NOT a cause of business fluctuations? a.) Business Investment b.) Government Activity c.) External Factors d.) Psychological Factors

None. All are considered to be causes of business flucations

What important event brought about the establishment of the Federal Deposit Insurance Corporation (FDIC)? Why?

The banking crisis followed by the stock market crash in 1929. Lawmakers wanted to prevent bank failures and wanted to increase confidence in the banking system

Which of the following would be most likely to cause an increase in real GDP and price levels?

an increase in the price of materials that are widely used such as steel

Representative money is money that is

backed by a valuable item, such as gold

Using the formula GDP= C + I + G + (X-M), what statement is not true?

batteries produced by Delco to be installed on Ford's assembly line would be counted seperately as part of GDP

debit cards

card used to make cashless purchases

Why would cattle, chocolate, and clothing be poor mediums of exchange?

cattle- aren't divisible and easy to transport and perishable Chocolate- not durable, is perishable Clothing- not durable

The producer price index measures

changes in the prices producers charge for the goods they sell

overdraft checking

checking account that allows costumers to write checks for more money than they have in their accounts

the part of the business cycle in which the economy stars to slow down is called

contraction

The Federal Reserve System was established to

control the amount of money in circulation

This passage is describing: It will take a few years for the global economy to achieve a new equilibrium between manufacturing production and consumer demand. Many goods are now in oversupply, and consumer demand is impaired by falling currencies and growth-inhibiting governmental policies... but these are cynical imbalances of the sort that have occurred for decades and will keep recurring from time to time.

equilibrium between aggregate supply and demand

barter

exchange of goods and services for other goods and services

disposable personal income

income remaining for people to spend or save after all taxes have been paid

business cycle

irregular changes in the level of total output measured by real GDP

What type of economic indicator is headline #1 in the table? 1. Housing stars lowest in months

is the leading indicator

What was the purpose of the Coinage Act?

it established the dollar as the basic unit of currency of the United States

It is important for money to be durable because

it must be able to withstand the wear and tear

How do you find a percentage?

last total - first total ____________________ first total

The change in prices of stocks and measured by the S & P 500 is an example of a

leading indicator

New orders for consumer goods and changes in the number of building permits issued for private homes are examples of

leading indicators

legal tender

money that must by law be accepted for payment of public and private debts

M1

moneys that can be spent immediately and against which checks can be drawn

M2

moneys that can be spent immediately and against which checks can be drawn plus near moneys such as savings deposits and money market deposit accounts

thrift insitutions

mutual savings, banks, savings and loan institutions, and credit unions

In the graph why is the number for net exports negative?

negative b/c the country bought more than they sold

How would you describe the performance of the U.S economy between 1992 and 2005

prolonged growth through 2006

leading indicators

statistics that point to what will happen in the economy

Explain which part of the business cycle the economy is likely to be in if new orders for consumer goods are rising.

the expansion phase

What happens when inflation occurs?

the purchasing power of the dollar declines

gross domestic product (GDP)

total dollar value of all final goods and services produced in a nation in a single year

national income

total income earned by everyone in the economy

aggregate demand

total of all planned expenditures in the entire economy

electronic funds transfer

transferring funds from one bank account to another without any paper money changing hands

automated teller machine (ATM)

units that allow costumers to access their banking without the help of a teller

transfer payments

welfare and other supplementary payments that a state or the federal government makes to individuals

deflation

prolonged decline in general price levels of goods and services


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