Econ: Unit 7 Econ Measures Review
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account from which deposited funds can be withdrawn at any time by writing a check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
