Econ Final

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28) Which of the following is NOT an autonomous expenditure in the aggregate expenditures model?

) imports

23) Aggregate demand is the relationship between the quantity of real GDP demanded and the ________.

) price level

33) If the price level is constant and the slope of the AE curve is 0.75, a decrease in government expenditures of $100 leads to a decrease in real GDP of

400

In a diagram with the consumption function, the ________ shows all points where disposable income equals consumption expenditures.

45-degree line

suppose bank a holds 200 reserves has deposits of 1000 and the desired reserve ratio is 15 percent ralph bank has excess reserves of

50

if the nominal interest rate is 7 percent and the inflation rate is 1 percent the real interest rate is approx

6

in an economy of 40 million people are employed, 2 million are unemployed and 8 million are not in the labor force

84

in an economy of 43 million people are employed, 3 million are unemployed and 4 million are not in the labor foce. what is the employment to population ratio

86

suppose china airlines wants to purchase a french airbus the price of the airbus is 95 million euro. if the exchange rate is 1 euro per 10 yuan the price of this airplane to china air lines is

950

41) In the short-run, real GDP can be greater than or less than potential GDP because in the short run the

D) money wage rate is fixed.

34) According to purchasing power parity, a rise in inflation in the United States. relative to the rest of the world will lead to

an exchange rate depreciation

joe likes to sleep late in the mornings and play tennis in the afternoons. the opportunity cost of joe attending his morning class for one hour

an hour of sleep given up

what will lead to an appreciation of the us dollar against british pound

an increase in brisstisd demand for imports form us

in 2015 the price of peanuts was rising which led to peanut butter buyers to expect the price of peanut butter would rise in the future. Consequently in the current market for peanut butter there was a _______ which resulted in ______ in the price of peanut butter and ____ in the quantity of peanut butter

an increase in demand for peanut butter an increase an increase

when the fed lowers the federal funds rate it can lead to

an increase in lending by banks

16) Which of the following increases aggregate demand?

an increase in the quantity of money

an increase in british demand for imports from the us

an incresae in british demand for imports from the us

last year the exchange rate between us dollars and median peso was 10 peso per dollar. today is it 11 peso per dollar here the dollar __________against the peso and the peso ______ against the dollar

appreciated depreciated

the demand curve for us dollars slopes downward becasue as the dollar _____ us goods become ___ expensive to foreign residents so they purchase fewer us goods an the quantity of dollars demanded decreases

appreciates m more

checks are to money because

are merely instructions to transfer money

discourage workers ____ counted as officially unemployed because they _____

are not are not actively seeking work

The study of economics

arises from the fact that our wants exceed available resources

in short run when the fed increases quantity of money

bond prices rise and the interest rate falls

36) Suppose the Fed wants to fix the U.S. dollar/Mexican peso rate at 11 pesos per dollar under a fixed exchange rate policy. If the exchange rate falls to 10 pesos per dollar, the Fed can

buy dollars.

human resources that perform the functions of organizing managing and assembling the other resources are called

entrepreneurship

the opportunity cost of good a in terms of good b is

equal to ration of the money price of good a to the money price of b

if the inflation rate is negative the price level in an economy is

falling

suppose that a bond promises to pay its holder 100 a year forever if the price of the bond increases from 1000 to 1250 then the interest rate on the bond

falls from 10 percent to 8 percent

which part of the federal reserve system meets every 6 weeks to determine the nations monetary policy

fedreal open market committte

A GDP is defined as the market value of all ____ in a given time period

final goods and services produced in a country

The fact that people with higher incomes get to consume more goods and services address the _____ part of one of the two big economic question

for whom

if foreigners spend more on us made goods and services than we spend on theirs

foreigners must borrow from the us or sell us assets to make up the difference

a recent accounting graduate from a major business school is searching for a place to begin his career as an accountant. this individual is best considered as

frictionally unemployed

expenditure that is an intermediate good

general motorrs buys new tires to put on the cars in its building

25) The U.S. fiscal policy implemented in 2008 was an attempt to

give billions of dollars to businesses and low- and middle-income Americans in order to stimulate business investment and consumption expenditure, and thereby increasing AD.

the richardo barro effect says that

government budget deficits have no crowding out effect because of taxpayers increase their savings to match the quantity of loanable funds demand by the government

the crowding out effect refers to

government investment crowding out private investment

the lower exchange rate to day ceteris paribus the

greater is the expected profit from buying us dollars today and holding them

net investmet equals

gross investment-depreciation

what will increase labor productivity

growth in capital per hour of labor technological change

in developing nations micro loans

have enabled small businesses with limited access to credit to purchase capital and expand thus allowing greater economic growth

when a government has a budget surplus the surplus

helps finance the investment

in the absence of the ricardo bra effect an increase in the government deficit results in a _____ real interest rate and a ___ equilibrium quantity of investment

higher lower

the circular flow diagram indicated that

households sell the services of factor of production to firms

moving along the aggregate production function all of what is held constant

human capital technology capital

a key factor that leads to economic growth is

human capital accumulation

if an economy has a velocity of circulation of 3 then

in a year the average dollar is exchanged 3 times to purchase goods and services in GDP

Potential GDP per labor hour can increase due to

inces in labor productivity

an increase in the demand for computers and a decrease in the number of sellers of computers will defiantly _________

increase the price of a computer

as a county that has a bowed out production possibilities frontier produces more of one good, the opportunity cost of a unit of that good

increases

if both the demand and supply increase the equilibrium quantity _____ and the equilibrium price ____

increases might rise, fall, or not change

If frito lay an american snack company opens a new manufacturing facility in mexico and produces snacks which are distributed in south america hen medicos GDP ____ and Us gdp ______

increases a doesn't change

the quantity of real money demanded is

independent of the price lebel

the presence of _____ creates a difference in the value between the market price and the factor cost of a product

indirect taxes and subsideies

which of the following best defines capital as a factor of production

instruments machines builidings used in the production process

26) When aggregate planned expenditure is less than real GDP, unplanned

investment occurs.

two reasons why valuing goods at they market prices is different than valuing them at their favor cost include

irdirect taxes and subsides

the required reserve ratio

is the fraction of a banks total deposits that is required to be held in reserves

the natural unemployment rate

is the unemploment at full employment

a higher savings rate that leads to an increase in the capital stock

leads to increases in labor productivity

due to the recession in 2008 firms decreased their profit expectations as a result there was a ______ shift in the ______ loanable funds curve

leftward demand for

the branch of economics that deals with the analysis of the whole economy

macroeconomics

macroeconomics differs from microeconomics in that

macroeconomics focuses on the nation economy and global economy

facilitate trade coordinates price information between buyers and sellers allow traders to enjoy gains from trade

markets

the most direct way in which money elimainates the need for double coincidence of wats is through its use as a

medium of exchange

the study of the decisions of individuals units in the economy is known as

micreconomics

investment is financed by

national saving borrowing from he rest of the world

a nations investment must be financed by

national saving plus borrowing form the rest of the world

in a market at the equilibrium price

neither buyers nor seller can do business a a better price

if the economy capital stock increases over time

net investment is positive

describes an individual who is cycle unemplyed

nicholas was laid off when orders for general motors cars fell during a recession

The main reason why the united states has a trade deficit with china is because chinas trade practices are unfair

normative statement

full time students and prisoners are

not in the labor force

if the money price of wheat increases an no other prices change the

opportunity cost

when the government hires people to serve in the army these people are no longer availible to do other work. this choice illustrates the concept

opportunity cost

the bias in the CPI typical

overstates inflation

as the real interest rate increases

people increase the quantity they say

the unemployment rate is the ____ who are unemployed

percentage of people in the labor force

factors that influence labor productivity include _____

physical capital human capital technology

classical growth theory argues that when real GDp per person rises above the subsistence level

population growth increases driving real GDP per person back to subsistence level

An increase in tuition means fewer students will apply to college

posititive statment

15) The SAS curve shifts if there is a change in

potential GDP

If CPI is 120 this means that

price are 20 percent higher than in the reference base period

In july 2014 the CPI inflation rate was .3 percent while the core CPI inflation rate was .1 percent. the difference between theses two measurements of inflation indicates

prices for food fuel were increasing more rapidly than prices for other goods

what is included int eh supply of loanable funds

private saving government budget surplus international borrowing

the quantity supplied of a good or service is the amount that

producers plan to sell during a given time period at a given price

The social arrangement that gives john grishma the writer of the best selling novels, the ownership of his novel is

property rights

components of the expenditure approach to measuring us gdp

purchases of food made by families purchases of us made movies purchases of new homes by familys

If the price level falls by 5 percent and workers money wage rates remain constant firms quantity of labor

quantity of labor will increase

In the labor market an increase in labor productivity ___ the real wage rate and ____ the level of employment

raises increases

if the economy is at full employment

real gdp equals potential gdp

what is used to calculate the standard of living

real gdp/population

One of the opportunity cost of economic growth is

reduced current consumption

the curvature of the producitonfunctuon shows that as employment increase the productive of labor

remains positive but decreases

an increase in the working age population results in a

rightward shift of the supply of labor curve and increase in potential GDP

when the nominal interest rate rises the opportunity cost of holding money

rises and people hold less

the fed buys 100 million of government securities from bank a. what is the effect on the federal reserves balance sheet

securities increased by 100 million and reserves of bank a increase by 100 million

the circular flow shows that the household sector earns its income by

selling factors of production

After hurricane Katrina devastated parts of mississippi and new orleans in 2005 we can be sure that the production possibilities frontier for that area temporariliy

shifted inward toward the origin

if new capital increases labor productivity the supply of labor ____ and the demand for labor _____

stays the same increases

suppose the country of tiny decided to open its borders to free trade. as a result a number of its workers lost their jobs to international completion and can't find new jobs because their skills don't match what is required for job openings. The workers who lost their jobs and searched for new ones ar best be considered part of

structional employment

wages for workers producing iPods and similar products will rise next year. walkman watch ask you to predict the effect of this change in next years market for iPods. Yuou credit that the major effect will be that the

supply curve for an iPod will shift leftward

the demand for mexican tomatoes by american food grocer chains creates a

supply of us dollars

if the quantity supplied exceeds the quantity demanded there is a

surplus and the price is above the equilibrium

substituion bias in the CPI refers to the fact that the CPI

takes no account of the substitution of goods by consumers when relative prices change

what is a major influence on the expected profit from an investment

technology advances

After you graduate you have decided to accept a position working at the bureau of labor statistics for 45,000 a year. the two other offers you received were working for walmart for 38000 and working for east and young consulting for 42000. Of these two offered you would have preferred the job at earns and young. What opportunity cost of accepting the position at the bureau of labor statistics

the 42000 you would d have been paid working for ernst and young

The slope of the saving function is equal to

the MPS.

An increase in the quantity of capital increases ________ and increase in the full-employment quantity of labor increases ________.

the SAS and the LAS; the SAS and the LAS

9) If the money prices of resources changes

the SAS curve shifts.

40) If the People's Bank of China adopted a flexible exchange rate policy

the U.S. dollar would depreciate.

If the People's Bank of China adopted a flexible exchange rate policy

the U.S. dollar would depreciate.

commercial bank reserves refers to

the cash in its vaults an its deists at the federal reserce

airbus is a european jet air line producer. indian airlines wants to but 23 airbus places from airbus due to increased demand for world to travel. as a result

the demand cure for european euros and the supply for indian rupees both shift rightward

if the federal reserve increases interest rates

the demand curve for us dollars shifts rightward and the supply curve of us dollars shift leftward

when the price of a pizza decreases from 14 to 12

the income effect points out that total purching power of people who buy pizza increases

potential gdp is

the maximum amount of gap that can be produced while avoiding shortages of labor capital land and entrepreneurship that would bring rising inflation

suppose that the unemployment rate equals 4.5 percent and that the natural unemployment rate rate is 5.5 percent. we can conclude that

the output gap is positive

according to the quantity theory of money in the long run an increase in the quantity of money results in an equal percentage increase in `

the price level

the statement that ____ is a positive statement

the price of sugar in the united states is higher than the price in Australia

ex of gross private domes investment component of gdp

the purchase of production machinery by IBM an increase in the finished goods invetory

Suppose the money wage rate and the price level both fall by 5 percent. as a result

the quality of labor demanded does not change because there is no change in the real wage

if the price of a hot dog is 2 and the price of a hamburger is 4 then

the relative price of a hot dog is 1/2 of a hamburger per hot dog

apples are a normal so if the price of an apple increases from 50 cents to 60 cents, the quantity of apples demanded decrease because of

the substitution an income effects

Intermediate goods are excluded form GDP because

their inclusion would involve doouble counting

reported gap increases when in fact total production is unchanged when

there is a shift from household production to market production a previously illegal activity is legalized

full employment means that

there is no cyclical unemployment

if the real interest rate increases from 3 to 5 percent

there will be a movement up along the dead for loanable funds

macroeconomics topics include

total national wide employment

in the computation of gap social security payments count as

transfer payments and are not included in gdp

glann a student who just graduated from college last week and is currently looking for job

unemployed

the consumer price index is a measure of the average of the prices paid by _____ for a fixed basket of consumer goods and services

urban consumers

if ford sells 200 explorers for a total of 400,000 to germany, while the us imports a 100 bmw for a total of 500000 from germany

us gdp decreases because net exports are negative

real gdp measure

value of total production linked to prices of a single year

when a country decides to produce fewer bombers and more public housing projects, it is answering the ____ part of one of the two big economic question

what

if you lend a dollar and at the end of the year the price level rose by 10 percent

you must have earned a nominal interest rate of 10 percent to maintain the purchasing power of your loan

what policy action could speed productivity growth

-tax incentives to encourage saving -encouraging international trade -directing public funds toward financing basic research

At the beginning of the year toms tubes had a capital stock of 5 tube inflating machines. during the year tom scrapped 2 old machines and purchased 3 new machines. what was his net investment

1 machine

Angie can produce either 1 uni of x or of y in an hour while benda can produce either 2 units of x or 4 units of y nan hour. there can be gains of exchange from

1 unit of x per unit of y for ages and 1/2 unit of x per unit of y for brenda

this year [izza hut makes a total investment of 1.3 billion in new stores. its depreciation in this year is 300 million. pizza huts gross investment is ___ and its net investment is ______

1.3 billion 1.0 billion

Suppose that in an hour joe can prepare 10 sandwiches or 5 pizzas. the opportunity cost of joe producing one sandwich is

1/2 pizza

based on the following data the country of tiny town the unemployment rate equals populaiton-- 100 labor force--80 number employed--70 discouraged workers--5

10/80 x100

last year in the country of n imports equaled exports. n gdp was 500 million its consumer expenditure was 380 million and its invesment was 20 million. n government expenditure on goods and services were

100 million

if the number of people unemployed 100 the number of people employed is 1000 and the working age population is 1400 tenth labor force is

1100

during 2014 the outcry of economics had a real gdp of 115 billion n the population was .9 billion. in 2013 real gap was 105 billion and the population was .85 billion . in 2014 real gdp per person was

128

suppose a country is producing 20 million of real god if the economy grows at 10 percent per year approximately how many years will to take for real gdp to grow to 80 milliion

14

Jen had an exam score of 50 % points. There is an extra credit assignment that Jen can complete that will raise his exa score by 20. Jess has determined that the extra credit assignment will take 10 hours of is time. Jen will complete the assignment if he values the

20 points more then the 10 hours

In January time into owned machines valuded at 1 million. during the year the market value of the equipment fell by 30 percent. during 2015 Tim spend 200,000 on new machines. During 2015 times gross investment totaled

200,000

if the basket of goods and services used to calculate the CPI cost of 200 in the reference base period and 450 in a later year, the CPI for the latter year equals

225

the quantity of money in an economy is 9 million and the velocity of circulation is 3. nominal GDP in this economy is

27 million

the price of a bag of corn chips is 3 and the price of a bottle of soda is 1. what is the relative price of a bag of corn chips

3 bottles of soda per bag of corn chips

during 2013 the country of economy ha a real gdp of 115 billion and the population was .9 billion. in 2012 real gdp was 105 billion and population was .85. Economics growth rate per person is

3.44

if real GDP is 13000 billion and aggregate hours are 20 million labor productivity is _____

40 dollars per hour

) When disposable income equals $800 billion, planned consumption expenditure equals $600 billion, and when disposable income equals $1,000 billion, planned consumption expenditure equals $640 billion. What is planned saving when disposable income is $800 billion?

A) $200 billion

If the price level in the U.S. is 120, the price level in South Africa is 140, and the nominal exchange rate is 7 South African rands per dollar, then the real exchange rate is

A) 6 South African goods per U.S. good.

1) Which of the following occurs while moving along a short-run aggregate supply curve?

A) The price level changes and the money wage rate is constant.

suppose a deposit in New York earns 6 percent a year and a deposit in London earns 4 percent a year. Interest rate parity holds if the

A) U.S. dollar depreciates by 2 percent a year.

14) The MPC is the fraction of

A) a change in disposable income that is consumed.

A) a change in the money wage rate B) a change in the price level

A) a change in the money wage rate --a reduction in the price of a raw material --technological progress

29) An increase in government expenditure on goods and services

A) increases aggregate demand.

24) The intertemporal substitution effect of the price level on aggregate demand

A) is one reason that the aggregate demand curve has a negative slope.

31) If the marginal propensity to import increases, then the

A) multiplier will decrease in value.

42) Arbitrage in the foreign exchange market, international loans markets, and goods markets results in

A) purchasing power parity, interest rate parity and law of one price.

39) In the short run, an increase in aggregate demand

A) raises the price level and increases real GDP.

6) When disposable income equals consumption expenditure, then

A) saving is zero.

49) A classical economist believes that

A) the economy is self-regulating and always at full employment.

37) When an increase in aggregate demand exceeds the increase in aggregate supply

A) the economy will experience inflation as the price level rises.

45) A country's balance of payments accounts records

A) the international trading, borrowing, and lending positions of a country over a period of time.

22) A change in imports caused by rising U.S. incomes is

B) a change in induced expenditure.

20) An increase in U.S. exports because of increasing foreign incomes represents ________ in the United States.

B) an increase in autonomous expenditure

A small country is an international borrower and its domestic supply of loanable funds increases. Consequently, the equilibrium quantity of loanable funds used in the country ________ and the country's international borrowing __

B) does not change; decreases

30) The AD curve slopes

B) downward due to the wealth and substitution effects.

13) The SAS curve and the LAS curve

B) intersect at potential GDP.

7) Real GDP

B) is equal to aggregate income.

The quantity of real GDP demanded equals $16.2 trillion when the price level is 90. If the price level rises to 95, the quantity of real GDP demanded equals

B) less than $16.2 trillion.

28) If you have $1,000 of money in the bank and the price level rises by 5 percent, your

B) money is worth less in terms of what it can purchase.

46) Which school of thought believes that real GDP always equals potential GDP?

B) only classical

33) In the short-run macroeconomic equilibrium

B) real GDP and the price level are determined by short-run aggregate supply and aggregate demand.

All of the following shift the short-run aggregate supply curve

B) technological progress. - a change in the money wage rate -a reduction in the price of a raw material

51) A monetarist economist believes that

B) the economy is self-regulating and will normally, though not always, operate at full employment if monetary policy is not erratic.

14) The supply of real GDP is a function of

B) the quantities of labor, capital and the state of technology.

Misty has the option of purchasing gone of three products. Brand A, B, or C. Each Cost 10 dollars. If she decides that brand A meets her needs best, then the opportunity cost of this decisions

Brand B or C depending on which is considered the highest value alternative forgone

20) If higher inflation is expected in the future, then the

C) AD curve shifts rightward.

29) When real GDP exceeds aggregate planned expenditure

C) GDP will decrease.

10) If the full-employment quantity of labor increases, then the

C) SAS curve shifts rightward and the LAS curve shifts rightward.

32) Which of the following does NOT occur as the economy moves from an expansion to a recession?

C) The change in planned spending exceeds the change in real GDP.

1) The consumption function shows how much

C) all households plan to consume at each level of real disposable income.

shift the short-run aggregate supply curve?

C) an increase in technology D) an increase in the quantity of capital -an increase in the money wage rate

38) When real GDP exceeds potential GDP, then the economy has

C) an inflationary gap.

2) If the marginal propensity to consume is 0.8, every $10 increase in disposable income increases

C) consumption expenditure by $8.00.

26) The AD curve shows the sum of

C) consumption expenditure, investment, government expenditures on goods and services, and net exports.

49) If the world real interest rate falls, then a country that is an international lender

C) decreases the amount of its lending.

11) According to the Keynesian theory, the typical firm

C) does not change its prices immediately when aggregate demand fluctuates.

37) If the Fed wants to depreciate the dollar against the yen, the Fed will

C) increase the supply of dollars by buying yen.

54) ________ economists believe that the economy is self-regulating and always at full employment.

Classical

7) An aggregate supply curve depicts the relationship between

D) the price level and the quantity of real GDP supplied.

18) Read the two statements below and indicate if they are true or false. I. Autonomous expenditures change when GDP changes. II. Aggregate planned expenditure is the sum of planned consumption expenditure, investment, government expenditure, and net exports.

D) I is false and II is true.

13) The MPS equals the ratio of

D) None of the above answers is correct.

21) Which of the following events shifts the aggregate demand curve leftward?

D) a decrease in government expenditures on goods and services

18) According to the intertemporal substitution effect, a higher price level

D) decreases the quantity of real GDP demanded.

25) All else being constant, autonomous expenditure

D) does not change with changes in real GDP.

A small country is an international lender and its domestic supply of loanable funds increases. Consequently, the equilibrium quantity of loanable funds used in the country ________ and the country's international lending ____

D) does not change; increases

17) The aggregate demand curve shows that, if other factors are held constant, a

D) higher price level results in a decrease in the quantity of real GDP demanded.

48) A Keynesian economist believes that

D) if the economy was left alone, it would rarely operate at full employment.

40) In a short-run macroeconomic equilibrium, potential GDP exceeds real GDP. If aggregate demand does not change, then the

D) short-run aggregate supply curve will shift rightward as the money wage rate falls.

12) The short-run aggregate supply curve

D) shows the relationship between aggregate production and the price level holding constant potential GDP and all resource prices.

8) If firms set prices and then keep them fixed for a period of time, their fixed prices imply that

D) the aggregate price level is fixed and that aggregate demand determines the quantity of goods and services sold.

Marginal benefit cures slope

downward, but not because of increasing opportunity cost

53) What could Keynes have meant by his now famous statement, "in the long run we are all dead?"

Government intervention in the economy is necessary in times of recession because an economy rarely restores itself to full- employment.

10) The components of aggregate expenditure include

I. imports. II. consumption.

34) Changes in which of the following will affect the size of the multiplier?

I. marginal propensity to import II. marginal propensity to consume III. marginal income tax rate

aggregate income, aggregate expenditure and GDP are

all equal

50) ________ economists believe that active help from fiscal and monetary policy is needed to insure that the economy is operating at full employment.

Keynesian

47) In 2009, just after taking office, President Obama approved an $800 billion stimulus package of tax cuts and increased government spending to combat the recession brought on by the financial crisis of 2007. Which group of economists most approved of President Obama's actions?

Keynesian economists

52) Which school of thought believes that recessions are the result of inappropriate monetary policy?

Monetarist

3) If the money wage rate rises, then the

SAS curve shifts leftward.

Positive statements

They described what is believed about how the world appears They can be tested as to their accuracy

Missouri can produce 10,000 tons of pecans per year or 5,000 tons of pears per year. Washington can produce 12,000 tons of pecans per year or 48,000 tons of pears per year. Which of the following statements would be true

Washinton has an absolute advantage in the production of both pecans and pears

one of the largest categories of exports form the us is now pop culture : movies music tv and videoss a direct conclusion from this is that compared to other counties the us has

a comparative advantage in producing pop culture

when part of the quantity of money is held in currency then

a currency drain occurs

always lowers the equilibrium price

a deaceease in demand combined with an increase in supply

what will shift supply left

a decrease in disposable income

a common definition of a recession is a time with

a decrease in real gap for two or more excessive quarters

If a nation's central bank increased domestic interest rates, the nation's exchange rate would change if the country's exchange rate was a

a flexible exchange rate.

an increase in a nations population results in

a movement along the nations production function

an advance in technology that increases productivity and an increase in the working age population results in

a rightward shift of the labor demand curve and of the labor supply curve

Examples of Factor of production and one that NOT

a univeristy teacher mineral resources an apartment building100 NOT 100 shares of microsoft stock

when the fed is _____ if is ______

adjusting the amount of money circulation conducting monetary policy

Neoclassical growth theory predicts that

advances in technology increase the productivity of capital which leads to an increase join investment and rising real GDP per person

suppose Misto bank expects the exchange rate to be 125 yen per us dollar at the end of the year. if todays exchange rate is 120 yen per us dollar Misto bank

buys us dollars today because it expects profit from buying us dollars and holding them

to produce a bushel of wheat farmer john must give up 2 bushels of corn where as farmer ben must give up 3 bushels of corn

comparitive advantage

goods that are produced this year stored in inventories and then sold to consumers next yeear

count as this years gdp

41) Which of the following exchange rate policies uses a target exchange rate, but allows the target to change?

crawling peg

increase in currency drain

deacreases the size of the money multiplier

Making a choice at the margin means

deciding to do a little bit more or a little bit less of an activity

a reccession occurs and peoples incomes decrease. knowing that an iPad is a normal good you predict that the demand fro an

decreases

the law of demand concludes that a rise in the price of a golf ball ____ the quantity demanded and ________

decreases creats a movement up along the demand curve for golf balls

if both the demand and supply decrease the equilibrium unity _____ and the equilibrium price ____

decreases might rise, fall, or not change

Suppose that the government is trying to decide between allocating its resources to build more dams or to build more free ways. in terms of forgone dams as more freeways are constrced the marginal benefit of additional freeways ____ and the marginal cost of additional freeways _____

decreases increases

a decrease in the demand for loanable funds and a leftward shift of the demand for loanable funds curve results from

decreases in the expected profit

43) Suppose the economy was initially in a long-run equilibrium. Then the world economy expands so that foreign incomes rise. U.S. aggregate demand ________ and eventually the money wage rate ________.

decreases; rises

when people who are holding the money of some other country want to exchange it for us dollars they _______ us dollars and ____ that other countries money

demand supply

when a good is imported into the us a ____ is created

demand for foreign currencies and a supply of dollars

the equilibrium price is the price at which the quantity

demanded equals the quantity supplied

Suppose a British bank offers a 3 percent interest rate while a U.S. bank offers a 7 percent interest rate. People must expect the U.S. dollar will

depreciate 10 percent.

4) In the very short term, planned investment ________ when GDP changes and planned consumption expenditure ________ when GDP changes.

does not change; changes


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