Economics Final
A production possibilities curve shows
The maximum amount of two goods that can be produced
Which of the following is a monetary policy intended to reduce inflation
decrease the money supply
All of the following statements describe a market economy EXCEPT
government
Which of the following would result in a decrease in aggregate demand
higher income tax rates
Assume the marginal propensity to consume is 0.8. If the government spending increases by $20 billion, then real GDP will
increase by $100 billion
The intersection of the aggregate demand and the aggregate supply curve defines the equilibrium level of ____ and the price level
real GDP
Which of the following constitute the types of unemployment occurring at the natural rate of unemployment
structural an frictional
The Phillips curve suggests a trade-off between
the level of unemployment and inflation
The purchase of government securities from the public by the FED will cause
the money supply to increase
If a bank's reserves are $8,000, it's demand deposits are $70,000, and the required reserve ratio is 10 percent, then excess reserves are
$1,000
Calculate the unemployment rate
6.9
equilibrium in the long run occurs when
AD intersects the short-run and the long-run AS curves at the same point
PPC in two nations
Germany, production of cars.
A recurring in economic is that people
Have unlimited economic wants but limited resources. (people want things but don't always have the resources)
Which of the following can be inferred from the information provided in the cable above?
India will be better off
If Japan has a comparative advantage over canada in the production of computers, which of the following must be true
Japan has a lower opportunity cost
in the short-run, an increase in the average price level in the economy will cause
profits
The opportunity cost of constructing a new public highway is the
Value of other goods and services
fiscal policy refers to
promote economic growth
Nominal GDP is adjusted for changes in the price level using
a price index
Which of the following would NOT shift the aggregate supply curve
an increase in the price level
A nation's real GDP will increase by increasing the following except
average price level
In a fractional reserve banking system
banks can create money
The circular flow model of the market system, households' major role is
buy products (people buy things) sell resources (to make product)
A negative supply shock
can cause stagflation
The most important function the Federal Reserve System is to
control
The built-in stabilizers in the economy tend to
dampen the irregular swings
In which phase of the business cycle will the economy most likely experience rising real output and falling unemployment rates
expansion
Which of the following is NOT a factor of production
money (CELL)
crowding out is a decrease in private investment caused by
increased borrowing
An increase in the money supply will
lower interest rates and increase
In the accompanying diagram, the phases of the business cycle from points A to D are
peak, recession
Which of the following best measures improvements in the standard of living of a nation
per capita
the effect of expansionary fiscal policy is shown as a
rightward shift
Which of he following items are included in money supply M2 but not M1
savings deposits
Macroeconomics approaches the study of economics from the viewpoint of
the entire economy
the expenditure approach to calculating GDP measures it by summing up
the total spending for consumption, investment
GDP tend to underestimate the productive activity in the economy because it excludes the value of output from
the underground economy
Core inflation measures
underlying increases
The economy enters the long run once
wage contracts to expire
