final- econ Nisha

When the Marginal Propensity to Consume (MPC) = 0.75, the multiplie r is?

4

if the price of computers in the graph above is 900, then there is

A surplus of 80 computers

Ceteris Paribus, when interest rates fall,

Aggregate demand increases

The united states is divided into _____ Federal reserves districts, each with a district bank.

12

The following table shows the Consumer Price Index calculated by the BLS, The CPI tells us that the cost of the market basket bought by typical urban consumers in 2015 has changed by, base year is 100, subtract 100- the CPI of the year its asking for

125% from 1982-84 (base year)

If the CPI increases from 200 last year to 230 this year, the economy has expirienced annual inflation of, Formula = later CPI - earlier CPI / earlier CPI * 100

15%

Suppose the CPI in feburary 2020 is 260. it means the price have increased by

160% from the base year

Based on the information in the table below, M1 is

1700

The largest component of total spending on goods and services in the US economy is

consumption spending

to reduce inflation, the FED will use which of the following policies?

contractionary policy

If the economy is experiencing recession, the Federal Reserve will adopt:

Expansionary monetary policy

Within the Federal reserve who is in charge of the monetary policy decisions?

Federal open Market Commitee

Gross Domestic Product (GDP) is the total market value of all

Final goods and services produced in a country, and or the total market value of all final goods and services produces by resources in the united states

The phase of the bussiness cycle during which economic activity and RDGP is decreasing is

Recession

In the graph below, the economy is currently producing Q1 level of RDGP where Qn denotes NRGDP, At Q1 level of real GDP the economy is in an

Recessionary Gap

if the price of tennis rackets were to increase, we would expect that as a result;

The demand for tennis balls to decrease.

which of the following would and economist classify as capital?

a lawyers personal computer

John paid 600 to buy an apple ipad, he used that 600 of money as

a medium of exchange

Which of the following people would be counted as unemployed ? (this may be a different scenario)

a retired school teacher looking for work to supplement her pension.

Assume that peanut butter and jelly are complementary goods. Ceteris Paribus, a decrease in the price of Peanut butter causes

an increase in demand for jelly

Which of the following will lead to a decrease in investment spending ?

an increase in the interest rate

A technological advance that increases the productivity of all inputs is best illustrated as:

an outward shift of the production possibilities frontier

Business Cycles

are ups and downs in the level of economic activity

which of the following actions is not a tool of monetary policy?

changing government spending and taxes

When the spending multiplier is equal to 2, an initial decrease in investment spending of 10 billion would

decrease aggregate demand by 20 billion

To close an expansionary gap using fiscal policy the government can,

decrease government spending or increase taxes

Sellers response to a surplus would be

decrease in price

in the circular flow diagram,

households are sellers in the resource market

Ceteris Paribus, an increase in government purchases will

increase aggregate demand

An Appropriate fiscal policy response due to a recession would be to,

increase government expenditures and decrease taxes

Economic growth is measured by

increase in RGDP

Demand pull inflation is associated with:

increase in consumer spending

Expansionary monetary policy implies

increase in money supply and decrease in interest rates

When an economy experiences cost- push inflation, there is

increase in unemployment along with rising prices.

Cotracionary fiscal policy

involves contracting the economy by raising taxes and reducing government spending

Because resources are scarce,

people must make choices among alternatives

Contractionary monetary policy will

raise interest rates and decrease aggregate demand

What does CPI measure ?

the average prices paid by urban consumers for a market basket of consumer goods and services

An economy is considered to experience full employment when

there is no cyclical unemployment

Ceteris Paribus, if real GDP is decreasing

unemployment is rising

Suppose BLS data shows that the working age population is 100,000, 30,000 peopleare considered as "not in the labor force", 60,000 people are employed and 10,000 people are counted as unemployed. What is the labor force participation rate? Formula=unemployed + employed / working age population * 100

70%

The Federal Reserve changes the amount of money in the economy by:

Changing the amount of excess reserves in the baking systems

If the economy is experiencing demand pull inflation, the federal reserve will adopt

Contractionary monetary policy

Government budget surplus occurs when?

Government expenditures are less than Tax revenue

Open market purchases of treasury securities by the Federal Reserve would:

Increase the banks excess reserves.

Robert lost his job and now takes care of the children while his wife works. Robert has decided he likes his "Daddy duties". Robert would take a job similiar to the one he lost if he was offered, but he is not actively seeking work. How is Robert Categorized in the unemployment figure?

Robert is not a part of the labor force

The saying "There is no free lunch", Means

To get something we like, we usually have to give up another thing we like.

Public debt is the

Total debt of the Federal Government held by the public.

federal funds rate is the interest rate at which

banks lend reserves to other banks.

An individual bank can lend out at most its

excess reserves

When the economy is slowing down, the FOMC policy decision would be to

lower the federal funds target rate.

Banks create money when they

make loans and create money

Which of the following is not a function of the Federal reserve system ?

making loans to the public

The aggregate demand curve slopes downward to the right, reflecting a relationship between the price level and

real GDP

An economic depression is considered to be a/an

recession

When Aggregate Demand curve shifts to the left, the economy experiences,

recession

Which of the following is not a monetary policy tool of the Federal Reserve?

setting the tax rates