Macroeconomics: Midterm
Real GDP is known as ______ and nominal GDP is known as ______.
Constant Price, Current Price
Suppose hat the cost of a blanket cost 2,500 one year and 2550 the next. What is the inflation rate?
2%
Calculate GDP deflator for an imaginary country, the nominal GDP is 1234 the Real GDP for the base year is 500
247
Which of the following is not one of the basic models that economists use to explain how a complex, real world works? a. The Circular Flow Diagram b. The Business Cycles Model c. Consumer Price Basket d. The Production Possibility Frontier
Consumer Price Basket
Long term trends in the economy are referred to as...
Economic Growth
The most effective use of a society's resources in satisfying people's wants and needs.
Efficiency
The __________ means that the total income must equal the total expenditure.
Equilibrium
The period of the business cycle in which real GDP is increasing is called...
Expansion
What category of policy do taxes fall under?
Fiscal Policy
The ______ tells us the rise in nominal GDP caused by a rise in prices rather than quantities produced.
GDP Deflator
Which of the following compares prices of all goods and services produced inside the country? a. Consumer Price Index b. Producer Price Index c. GDP Deflator d. Inflation Rate
GDP Deflator
Within the circular flow diagram there are two markets, these are markets for ________ and markets for ________.
Goods and Services, Factors of Production
____is when government policy reduces social spending.
Austerity
CPI is calculated devising a...
Basket of Goods
The fluctuations in output, employment, financial conditions, and prices are called?
Business Cycle
What is the equation to calculate GDP?
C+I+G+(X-M)
Productive efficiency can be defined as using all of the following to maintain the maximum sustainable level of output that an economy can produce except: a. Labor Force b. Government Expenditures c. Fixed Capital d. Technology
Government Expenditures
A measure of both the incomes and expenditures of an economy is?
Gross Domestic Product
What is the market value of all final goods and services produced within a country in a given period of time?
Gross Domestic Product
Of the following items which would be considered port of US's GDP? a. Damage to a home b. Profits earned by EA in Spain c. The purchase of an office building d. Unemployment Insurance
The purchase of an office building
What is the difference between GDP calculated by products vs. earnings?
They are the same
Unemployment insurance is an example of what macroeconomic calculation of National Income?
Transfer Payments
What is not a current example of Government Policy for inefficiency? a. Anti-Trust Laws b. Anti-pollution laws c. Unemployment Standards d. Public Education
Unemployment Standards
When is the output gap negative?
When Potential GDP > Real GDP
The three factors of production include?
Land, Labor, Capital
A mechanism through which buyers and sellers interact to determine prices and exchange goods, services, and assets.
Markets
What is a tradeoff between two different macroeconomic principles and is considered short-run?
Phillips Curve
What, according to Joseph Stiglits, is the principle cause of you socially unequal society?
Political power influenced by special interests
A business cycle includes short run fluctuations in all of the following except. a. Employment b. Financial conditions c. Prices d. Potential GDP
Potential GDP
The maximum sustainable level of output that the economy can produce.
Potential GDP
the maximum sustainable level of output that the economy can produce.
Potential GDP
The calculation for the GDP deflator is?
(Nominal GDP/Real GDP) x 100
GDP per person tell us the ____ and ____ of the average person.
Income, Expenditure
Points outside of the PPF are what?
Infeasible
Which of these are not a market failure. a. Monopolies b. Externalities c. Inflation d. Inefficiency
Inflation
What are the three effects of an economy operating at its potential GDP?
Inflation Increases Unemployment Decreases Labor Force and Capital Stock Increase
What is the percentage change in the overall level of prices from one year to the next?
Inflation Rate
According to the short run, the Phillips Curve illustrates the trade off between...
Inflation and Unemployment
Recently the Fed of teh US announced that it was going to issue more money through QE. The expected results are an eventual rise in _____ and an eventual drop in ____.
Inflation, Unemployment
When evaluating potential and real GDP if a country is outputting above its potential then ______ tends to rise, if a country is operating below its potential then _____tends to rise.
Inflation, Unemployment
What is the indicator of the maximum quantity of goods that can be efficiently produced by an economy?
Production Possibilites Frontier
The two primary methods for a government to control macroconomics within a country are Monetary and Fiscal policy. the following are an example of each; pick the correct one that includes both a monetary and fiscal policy a. Regulating Financial Institutions, Taxation b. Buying and Selling options, Subsidies c. Buying and Selling bonds, Inflation d. Regulating financial institutions, Subsidies
Regulating Financial Institutions, Taxation
_____ means that a society has limited resources resources and therefore cannot produce all the goods and services people wish to have.
Scarcity
Which of these is not included in monetary policy? a. Buying Bonds b. Selling Bonds c. Financial Regulation d. Taxation
Taxation
John Keyes developed macroeconomics after what event?
The Great Depression
