Econ Final Review

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Which of the following is an example of a price cap regulation​?

A government regulation has forced cable TV operators to lower the price of cable TV from​ $55 a month to​ $30 a month.

Who in the following statements is a ​full-time worker and who is a ​part-time worker​?

Dan works at Subway for 8 hours each day from Monday through Friday. Mary works at​ Starbucks' for 4 hours each day on weekends.

Which of the following illustrates property rights​?

Dave has patented his invention.

Which of the following is an example of strategies​?

Dell makes an annual economic profit of​ $5 billion by investing in​ R&D and an economic profit of​ $6 billion by not investing in​ R&D.

Which of the following firms produce at the efficient scale​?

Dell produces 100 computers a week at which its average total cost is minimized.

​Cost-push inflation is an inflation that begins with an increase in​ _____.

cost

National debt is the amount of government​ _____ -​ _____ that has arisen from past​ _____.

debt​ outstanding; debt; budget deficits

Which of the following is an example of an intermediate good or service​?

Samsung buys compressors for manufacturing refrigerators.

Who in the following statements is a ​part-time worker for economic reasons​?

Sherrie is a graduate who started working at Safeway pharmacy for 4 hours each​ day, three days a​ week, as they do not currently have a​ full-time opening.

There are five firms in a market and the market shares of the firms are 40​ percent, 25​ percent, 20​ percent, 10​ percent, and 5 percent. What is the​ Herfindahl-Hirschman Index for this​ market?

The​ Herfindahl-Hirschman Index for this market is 2,750

A recessionary gap is a gap that exists when potential GDP​ _____ real GDP and that brings a​ _____ price level. An inflationary gap is a gap that exists when real GDP​ _____ potential GDP and that brings a​ _____ price level.

exceeds; falling; ​exceeds; rising

Rent seeking is the lobbying for special treatment from the​ _____ to​ _____ or to divert consumer surplus or producer surplus away from others.

government; create economic profit

An open market operation is the purchase or sale of​ _____ -​ _____ - by the​ _____ in the open market.

government​ securities; U.S. Treasury bills and​ bonds; New York Fed

The unemployment rate is the percentage of the people in the​ _____ who are unemployed.

labor force

A real business cycle is a cycle that results from fluctuations in the pace of growth of​ _____ and​ _____.

labor​ productivity; potential GDP

The nominal interest rate is the dollar amount of interest expressed as a percentage of the amount​ _____. The real interest rate is the goods and services forgone in​ interest, expressed as a percentage of the amount​ _____ and calculated as the nominal interest rate minus the​ _____.

loaned; ​loaned; inflation rate

Which of the following firms is most likely to be a​ monopoly?

local distributor of electricity

The Federal Open Market Committee is the​ Fed's _____ committee.

main policy making

The nominal wage rate is the average​ _____ wage rate measured in​ _____ dollars. The real wage rate is the average​ _____ wage rate measured in the dollars of​ _____ year.

hourly; current; ​hourly; a reference base

The U.S. labor force participation rate​ ______.

increased from 59%in 1960 to 67% in 1999

Aggregate demand decreases if fiscal policy​ ______ taxes or​ ______ transfer payments.

increases; decreases

Aggregate demand decreases if the exchange rate​ ______ or foreign income ​______.

increases; decreases

The productivity curve is the relationship that shows how​ _____ changes as the quantity of​ _____ changes.

real GDP per hour of​ labor; capital per hour of labor

Potential GDP is the value of​ _____ when all the​ economy's factors of production​ - labor,​ capital, land, and entrepreneurial​ ability- are​ _____.

real​ GDP; fully employed

Aggregate demand is the relationship between the quantity of​ _____ demanded and the​ _____ when all other influences on expenditure plans remain the same.

real​ GDP; price level

Aggregate supply is the relationship between the quantity of​ _____ supplied and the​ _____ when all other influences on production plans remain the same.

real​ GDP; price level

Macroeconomic equilibrium occurs when the quantity of​ _____ demanded equals the quantity of​ _____ supplied at the point of intersection of the​ _____ curve and the​ _____ curve.

real​ GDP; real​ GDP; AD​; AS

Between 1914 and​ 2014, the average growth rate of real GDP per person in the United States was 2 percent a year. During this​ period, ______ grew at a faster rate than​ ______.

real​ GDP; the population

Social interest theory is the theory that​ _____ achieves an​ _____ allocation of resources. Capture theory is the theory that the regulation serves the​ self-interest of the producer and results in​ _____, _____, and deadweight loss.

regulation; efficient; maximum​ profit; underproduction

When the price level and the money wage rate rise by the same​ percentage, unemployment​ _______.

remains the same

A means of payment is a method of ​ _____ a debt.

settling

The ​Herfindahl-Hirschman Index is the​ _____ of the percentage market share of each firm summed over the​ _____ firms​ (or summed over all the firms if there are fewer than​ _____) in a market.

square; 50​ largest; 50

A cost of living index is a measure of the change in the amount of money that people need to spend to achieve a given​ _____.

standard of living

Suppose that the number of jobs in the fishing industry decreases but the number of jobs in the travel industry increases. Initially, ______________.

structural employment increases

Economic growth is defined as the ​ _____ .

sustained expansion of production possibilities

The cyclical surplus or deficit is the budget balance that arises because​ _____ and​ _____ are​ _____ their​ full-employment levels.

tax​ revenues; outlays; not at

Exports of goods and services are items that firms in​ _____ produce and sell to​ _____.

the United​ States; any other country

The PCE price index is an average of the current prices of​ _____ included in the consumption expenditure component of​ GDP, expressed as a percentage of​ _____ year prices.

the goods and​ services; base

Gross national product is​ _____

the market value of all the final goods and services produced anywhere in the world in a given time period by the factors of production supplied by the residents of that country

When cyclical unemployment increases and other things remain the​ same, ______.

the natural unemployment rate does not change

In an​ oligopoly, the outcome​ _______.

may be the monopoly​ outcome, or the perfect competition​ outcome, or something in between

In the short​ run, a monopolistically competitive firm​ ______.

might incur an economic loss

The city of Portland has three major cab service companies.

mutual​ interdependence; takes

In monopolistic​ competition, _______.

no one​ firm's actions directly affect the actions of the other firms

Currency consists of​ _____.

notes​ (dollar bills) and coins

Saving is the amount of income that is​ _____ in net taxes or spent on​ _____ goods and services.

not​ paid; consumption

Monopoly is a market in which one firm sells a good or service that has​ _____ substitutes and​ _____ blocks the entry of new firm

no​ close; a barrier

The labor force is the number of people employed plus the​ _____.

number unemployed

The dry cleaning industry is in monopolistic competition. In the short​ run, the​ profit-maximizing price is​ $10 per item and the average total cost is​ $6 per item. In​ long-run equilibrium, the​ profit-maximizing price is​ $8 per item. In​ long-run equilibrium, what is the economic profit of a firm in the dry cleaning​ industry?

n​ long-run equilibrium, the dry cleaning firm makes ​$0 economic profit.

Classical macroeconomics is the view that the market economy​ _____, that aggregate fluctuations are​ _____, and that government intervention​ _____ improve the efficiency of the market economy.

works​ well; a natural consequence of an expanding​ economy; cannot

Monetarist macroeconomics is the view that the market economy​ _____, that aggregate fluctuations are​ _____, but that fluctuations in the​ _____ generate the business cycle.

works​ well; a natural consequence of an expanding​ economy; the quantity of money

If real GDP is​ $1,000,000, exports are​ $200,000, imports are​ $300,000, and aggregate labor hours are​ 100,000, labor productivity is​ _____.

​$10 per hour

If tax revenues are​ $3,500 billion and the​ government's budget balance is a​ $720 billion​ deficit, calculate the​ government's outlays.

​$4,220

Hyperinflation is inflation at a rate that exceeds​ _____ percent a month​ (which translates to​ _____ percent per​ year).

​50; 12,875

The reference base period is a period for which the​ _____ is defined to equal​ _____. Currently, the reference base period is​ 1982-1984.

​CPI; 100

Which of the following is money​?

​Charlie's checking account deposit at the Bank of America.

Which of the following countries is facing a recession​?

​Japan's real GDP of 3.8 percent in the first quarter decreased by 0.3 and 0.4 percent respectively in the second and third quarters of 2012.

M2 consists of​ _____ plus​ _____ and​ _____ deposits,​ _____, and other deposits.

​M1; savings​ deposits; small​ time; money market funds

The core inflation rate is the annual percentage change in the​ _____ price index​ _____ the prices of food and energy.

​PCE; excluding

Excess reserves are a​ bank's _____ reserves minus its​ _____ reserves.

​actual; desired

A marginally attached worker is a person who does not have a​ job, is​ _____ and​ _____ to​ work, has​ _____ specific efforts to find a job within the previous​ _____ weeks, but has looked for work sometime in the recent past.

​available; willing; not​ made; four

The Consumer Price Index is a measure of the​ _____ of the prices paid by​ _____ consumers for a fixed market basket of consumption goods and services.

​average; urban

The velocity of circulation is the​ _____ number of times in a​ _____ that each dollar of money gets used to buy final goods and services.

​average; year

Reserves consist of the currency in the​ _____ plus the balance on its​ _____ account at​ _____.

​bank's vaults;​ reserve; a Federal Reserve Bank

The monetary base is the sum of​ _____, _____, and​ _____ at the Fed.

​coins; Federal Reserve​ notes; banks' reserves

Perfect price discrimination is the price discrimination that extracts the entire​ _____ surplus by charging the​ _____ price that​ _____ are willing to​ _____ for each unit.

​consumer; highest;​ consumers; pay

Full employment is when there is no​ _____ unemployment​ or, equivalently, when all the unemployment is​ _____ or​ _____.

​cyclical; frictional; structural

Depreciation is the​ _____ in the value of​ _____ that results from its use and from obsolescence.

​decrease; capital

When the unemployment rate is​ ______ than the natural unemployment​ rate, cyclical unemployment is​ _______.

​less; negative

A cartel is a group of firms acting together to​ _____ output,​ _____ price, and increase​ _____.

​limit; raise; economic profit

The production function is a relationship that shows the​ _____ quantity of​ _____ that can be produced as the quantity of​ _____ employed changes and all other influences on production remain the same.

​maximum; real​ GDP; labor

Fiat money are objects that are​ _____ because the law decrees or orders them to be​ _____.

​money; money

The equation of exchange is an equation that states that the quantity of​ _____ multiplied by the velocity of circulation equals the​ _____ multiplied by​ _____.

​money; price​ level; real GDP

The ​working-age population is the total number of​ _____ aged​ _____ years and over who are not in​ jail, hospital, or some other form of institutional care or in the U.S. Armed Forces.

​people; 16

The business cycle is a​ _____ but​ _____ up-and-down movement of total​ _____ and other measures of economic activity.

​periodic; irregular; production

Economic freedom is a condition in which people are able to make​ _____ choices, their private property is​ _____, and they​ _____ markets.

​personal; protected by the rule of​ law; are free to buy and sell in

At a business cycle​ trough, cyclical unemployment is​ ______ and at a business cycle​ peak, cyclical unemployment is​ ______.

​positive; negative

Rate of return regulation is a regulation that sets the​ _____ at a level that enables a firm to earn a specified target rate of return on its​ _____.

​price; capital

The ​prisoners' dilemma is a game between two​ _____ that shows why it is hard to​ _____ even when it would be beneficial to both players to do so.

​prisoners; cooperate

A south sea island produces only coconuts. In​ 2010, the price of a coconut is ​$1.50 and the quantity produced is 400. In 2016​, the price of a coconut is ​$2.50 and the quantity produced is 450. 2010 is the base year. Real GDP in 2016 is​ ______.

$675

The money multiplier is 1.5 and the currency drain ratio is 0.5. What is the desired reserve​ ratio?

0.5

You deposit​ $200 in a savings account on January​ 1, and the bank pays you interest of​ $10 at the end of the year. During the​ year, the average price level rises by 2 percent. The real interest rate on your savings account is​ ______.

3 percent a year

The currency drain ratio is 0.2 and the desired reserve ratio is 0.2. What is the money​ multiplier?

3.0

Consider the business​ cycle, and then choose the statement that is correct.

A business cycle is periodic but irregular.

Choose the statement about money that is correct.

Barter requires a double coincidence of wants.

​Chained-dollar real GDP is the measure of real GDP calculated by the​ _____.

Bureau of Economic Analysis

Which of the following is an example of a final good or service​?

Dan bought a Toyota Camry.

Who in the following statements is a discouraged worker​?

Dan is available to work but has not looked for a job in the past eight weeks because of repeated applications but no single offer.

A monopoly that can perfectly price discriminate has a marginal revenue curve that is steeper than the demand curve for the good that the monopoly produces. If a monopoly can perfectly price​ discriminate, it produces no deadweight loss and is more efficient than a​ single-price monopoly.

False True

Which of the following is an example of product differentiation​?

I prefer Nike shoes while my friend prefers Puma shoes.

Which of the following is an example of a ​price-discriminating monopoly​?

IMAX charges​ $6 per movie ticket for children younger than​ 8, and​ $8.50 per movie ticket for adults.

In December 2004​, checkable deposits owned by individuals and businesses were ​$667 ​billion; Upper M 1 was $ 1 comma 372 ​billion; currency held by individuals and businesses was $ 697 ​billion; Upper M 2 was $ 6 comma 422 ​billion; savings deposits were $ 3 comma 520​; and small time deposits were $ 817 billion. Calculate traveler's checks in circulation in December 2004. Calculate money market funds and other deposits in December 2004.

In December 2004 traveler's checks in circulation were ​$ 8 billion. Money market funds and other deposits in December 2004 were ​$ 713 billion.

​_______ published The General Theory of​ Employment, Interest, and Money in​ _______. His theory was that​ ______.

John Maynard​ Keynes; 1936 too little private spending is the cause of depression and recession

Which of the following statements illustrates structural unemployment​?

Outsourcing resulted in many job losses in the mid 2000s.

Which of the following is an example of consumption expenditure​?

Rachel buying a TV.

Which of the following statements illustrates frictional unemployment​?

Robin is quitting his current job to find another that has better prospects.

Choose the correct statement. 1. The most basic precondition for economic growth is an appropriate incentive system. 2. Property rights and markets create incentives for people to save and invest. 3. Early human societies based on hunting and gathering experienced economic growth. 4. Economic growth does not occur in the environment of an authoritarian political system.

Statements 1 and 2 are correct.

Which of the following economies is facing stagflation​?

The European economy is experiencing a decrease in real GDP for three quarters and a rise in the price level.

Choose the statement about the Fed that is correct.

The FOMC meets approximately every six weeks to review the state of the economy.

Which of the following statements illustrates monetary policy​?

The Fed has raised the federal funds rate by 0.3 percent.

Which of the following is an example of regulation​?

The Surface Transportation Board influences the prices on interstate railroads.

Which of the following statements illustrates fiscal policy​?

The US government has proposed a hike in the corporate tax rate.

Which of the following is an example of government expenditure on goods and services​?

The White House buying internet services.

A bank holds ​$5 for every​ $100 in deposits. The bank wants to hold ​$1 for every​ $100 in deposits. The bank holds excess reserves of ​$7 comma 000 and actual reserves of ​$13 comma 000. What is the actual reserve​ ratio, the desired reserve​ ratio, and the desired reserves​?

The actual reserve ratio is 0.05. The desired reserve ratio is 0.01. The desired reserves are ​$ 6,000.

Which of the following is an example of a duopoly​ market?

The city of Portland has three major cab service companies.

The inflation rate is 5 percent a​ year, the real GDP growth rate is 8 percent a​ year, and the rate of increase in velocity is 1 percent a year. What is the money growth rate​?

The money growth rate is 12 percent a year.

An economy has a recessionary gap. With no change in aggregate​ demand, how does the economy return to full​ employment?

The money wage rate​ falls, aggregate supply​ increases, and the price level falls.

The real wage rate is ​$12.00 an hour and the CPI is 114. What is the nominal wage​ rate?

The nominal wage rate is ​$13.68 an hour.

Consider potential GDP and then choose the statement that is correct.

The potential GDP line is vertical because potential GDP is independent of the price level.

Consider aggregate supply and then choose the statement that is correct.

The quantity of real GDP supplied equals potential GDP at the price level at which the real wage rate is at its​ full-employment equilibrium level.

Which of the following is an example of deregulation​?

The quota on milk production has been lifted by the Common Agricultural Policy of the EU.

Consider the demand for​ labor, and then choose the statement that is correct.

The real wage rate influences the quantity of labor demanded because what matters to firms is how much output they must sell to earn the dollars they pay the workers.

Which of the following statements illustrates diminishing returns​?

The second billion hours of labor changes real GDP from​ $1 to​ $3 trillion and the third billion hours of labor changes real GDP from​ $3 to​ $4 trillion.

Consider what is included in the measurement of​ GDP, and then choose the correct statement.

The underground​ economy, which is not included in GDP is the part of the economy that is hidden from the view of the government.

In 2009​, U.S. exports of goods and services are ​$1 comma 587 billion and imports of goods and services are ​$1 comma 976 billion. What is the value of net​ exports?

The value of net exports in 2009 is -389 billion dollars.

In the United States in 2002​, the GDP price index was 89.5 and real GDP was $ 12,266 billion. What is the value of nominal GDP in 2002​?

The value of nominal GDP in 2002 is $10,978 billion.

GDP is $30 billion and the quantity of money is $5 billion. What is the velocity of circulation?

The velocity if circulation is 6.

GDP in the United States increased between 2016 and 2017. Which of the following could NOT account for this​ increase?

We paid lower prices for our goods and services and production remained constant.

Which of the following is included in the measure of U.S.​ GDP?

a 2013 Grand Am produced and sold as a new car in the United States in 2013

When natural or legal forces work to protect a firm from potential​ competitors, the market is said to have​ _______.

a barrier to entry

Money multiplier is the number by which​ ________ is multiplied to find the resulting​ _________.

a change in the monetary​ base; change in the quantity of money

In each of the following​ transactions, classify the item as a final​ good, an intermediate​ good, or neither.

a final good; an intermediate good

Which of the following is an example of​ investment?

a firm adding unsold output to the inventory

A payoff matrix is a table that shows the payoffs for each player for every possible combination of​ _____ the players.

actions by

The government expenditure multiplier is the effect of a change in government expenditure on goods and services on​ _____.

aggregate demand

The tax multiplier is the effect of a change in taxes on​ _____.

aggregate demand

​Demand-pull inflation is an inflation that starts because​ _____.

aggregate demand increases

When investment​ increases, _______

aggregate demand increases and income increases. The increase in income induces an increase in consumption expenditure so aggregate demand increases by more than the initial increase in investment

In game​ theory, strategies include​ _______.

all possible actions of each player

The quantity of labor demanded is the total labor hours that​ _____ during a given time period at a given​ _____. The demand for labor is the relationship between the​ _____ and the​ _____ when all other influences on hiring plans remain the same.

all the firms in the economy plan to​ hire; real wage​ rate; quantity of labor​ demanded; real wage rate

The GDP price index is an average of the current prices of​ _____ included in the​ GDP, expressed as a percentage of base year prices.

all the goods and services

Which of the following are examples of monetary policy that decrease aggregate​ demand?

an increase in transfer payments and an increase in interest rates

The natural unemployment rate is the unemployment rate when the economy is​ _____.

at full employment

The structural surplus or deficit is the budget balance that would occur if the economy were​ _____.

at full employment

Which of the following industries is an example of monopolistic​ competition?

audio and video equipment

The reference base period for the CPI is​ 1982-1984. In January 2012​, the CPI was 226.7. This number tells us that the​ ______ of the prices paid by urban consumers for a fixed basket of consumer goods and services was​ ______.

average; 126.7 percent higher in January 2012 than the average of​ 1982-1984

The U.S. unemployment rate​ ______.

averaged 5.8 percent between 1948 and 2016

Cyclical unemployment is the fluctuating unemployment over the business cycle that increases during​ _____ and decreases during​ _____.

a​ recession; an expansion

The Nash equilibrium of a​ prisoners' dilemma game is that​ ______.

both players confess

At the end of 2007 a student has ​$500 in a bank savings deposit that is earning an interest rate of 5 percent a year. If the student leaves the savings account​ untouched, his deposit will have grown to ​$1000 ​______.

by 2021

Net taxes are taxes paid minus​ _____.

cash benefits received from governments

The Federal Reserve System ​(the Fed) is the​ _____ of the United States.

central bank

______ macroeconomics is the view that the market economy works​ well, that aggregate fluctuations are a natural consequence of an expanding​ economy, and that government intervention cannot improve the efficiency of the market economy.

classical

A rise in the money wage rate when the economy is at potential GDP​ ______.

decreases aggregate supply because a rise in the money wage rate increases​ costs, so firms employ fewer workers

Aggregate demand decreases if expected future​ income, inflation, or profits​ ______. And aggregate demand decreases if fiscal policy​ ______ government expenditure.

decreases; decreases

Aggregate demand decreases if monetary policy​ ______ the quantity of money and​ ______ interest rates.

decreases; increases

When the price level rises but the money wage rate remains​ unchanged, unemployment​ ______ and the quantity of real GDP supplied​ ______.

decreases; increases

A price cap regulation is often combined with​ _______ in case the regulator sets the cap too high.

earnings sharing regulation

Excess capacity is the amount by which the​ _____ exceeds the quantity that the firm produces.

efficient scale

If the real wage rate is at the​ full-employment equilibrium​ level, real GDP is​ ______.

equal to potential​ GDP, which is efficient but is not the most that can be produced

​Full-employment equilibrium occurs when equilibrium real GDP​ _____.

equals potential GDP

Marginal cost pricing rule is a rule that sets price​ _____ marginal cost to achieve​ _____ output. Average cost pricing rule is a rule that sets price​ _____ average​ _____ cost to enable a regulated firm to avoid economic loss.

equal​ to; an​ efficient; equal​ to; total

Net exports of goods and services increase when​ ______.

exports of goods and services increase and imports of goods and services decrease

Classical macroeconomics​ _______.

fell into disrepute during the Great Depression

If the money wage rate increased from ​$40.00 to ​$44.46 an hour and consumer prices rose by 14 ​percent, we would expect​ ______ people to try to find a job and employed people to want to work​ ______ hours. The​ ______ would​ ______.

fewer; shorter quantity of labor​ supplied; decrease

Nash equilibrium is an equilibrium in which each player takes the best possible action​ _____ the action of the other player.

given

A medium of exchange is an object that is generally accepted in return for​ _____. Barter is the direct exchange of goods and services for​ _____, which ​ _____ a double coincidence of wants.

goods and​ services; other goods and​ services; requires

Currency​ _________.

inside the banks is not money because it​ isn't available as a means of payment

The value of the CPI in the base period​ ______.

is 100 no matter what reference base period is chosen

Keynesian macroeconomics is the view that the market economy​ _____ and needs​ _____ to achieve full employment and sustained economic growth.

is inherently​ unstable; active government intervention

If the CPI rises from 120 to​ 126, then​ ______.

on​ average, the price paid by urban consumers for a fixed basket of consumer goods and services rises by 5 percent

The output gap is real GDP minus​ _____ expressed as a percentage of​ _____.

potential​ GDP; potential GDP

The inflation rate is the percentage change in the​ _____ from one year to the next. Deflation is a situation in which the​ _____ is​ _____ and the inflation rate is​ _____.

price​ level; price​ level; falling; negative

Automatic stabilizers are features of fiscal policy that stabilize​ _____ without explicit action by the government.

real GDP

Induced taxes are taxes that vary with​ _____.

real GDP

The economic growth rate is the annual percentage change of​ _____.

real GDP

The economic growth rate is the annual percentage change of​ ______.

real GDP

Fiscal imbalance is the present value of the​ government's commitments to pay benefits minus​ _____.

the present value of its tax revenues An automatic fiscal policy is a fiscal policy action that is triggered by​ _____. A discretionary fiscal policy is a fiscal policy action that is initiated by​ _____.

An open market operation is​ ______.

the purchase or sale of government securities by the Federal Reserve System in the open market

An automatic fiscal policy is a fiscal policy action that is triggered by​ _____. A discretionary fiscal policy is a fiscal policy action that is initiated by​ _____.

the state of the​ economy; an act of Congress

Full employment is defined as a situation in which​ _______.

the unemployment rate equals the natural unemployment rate

The ​four-firm concentration ratio is the percentage of the​ _____ in an industry accounted for by the four largest firms in the industry.

total revenue

The CPI market basket consists of items that​ ______ buy and​ ______.

urban​ households; the Consumer Expenditure Survey is used to update it frequently

The Rule of 70 is the number of years it takes for the level of any variable to double. It is approximately 70​ _____ by the annual percentage​ _____.

​divided; growth rate of the variable

The quantity theory of money is the proposition that when real GDP​ _____ potential​ GDP, an increase in the quantity of money brings​ _____ percentage increase in the​ _____.

​equals; an​ equal; price level

Net exports of goods and services is the value of​ _____ of goods and services​ _____ the value of​ _____ of goods and services.

​exports; minus; imports

Gross domestic product ​(GDP​) is the market value of all the​ _____ goods and services produced​ _____ a country in a given time period.

​final; within

Imports of goods and services are items that​ _____ in the United States​ _____ the rest of the world.

​households, firms, and​ governments; buy from

M1 consists of currency held by​ _____ and​ _____, _____, and​ _____ owned by individuals and businesses.

​individuals; businesses;​ traveler's checks; checkable deposits

A​ profit-maximizing monopoly never produces output in the​ _______ range of its​ _______ curve.

​inelastic; demand

The federal funds rate is the​ _____ rate on​ _____ loans.

​interest; interbank

Potential GDP is the value of real GDP when all the​ economy's factors of production​ - _____,​ _____, _____, and​ _____ - are fully​ _____.

​labor; capital;​ land; entrepreneurial​ ability; employed

The slope of the production function becomes​ _______ steep as the quantity of​ _____ increases because of diminishing returns.

​less; labor

The Great Depression was a period of high​ _____, low​ _____, and extreme economic hardship that lasted from​ _____ to​ _____.

​unemployment; incomes;​ 1929; 1939

The labor force participation rate is the percentage of the​ _____ who are members of the labor force.

​working-age population

Real GDP growth rate​ = ______.

​​[(Real GDP in current year minus Real GDP in previous ​year) divided by Real GDP in previous ​year] times 100

Real GDP is the value of the​ _____ goods and services produced in a given year expressed in terms of the prices in​ _____ year. Nominal GDP is the value of the​ _____ goods and services produced in a given year expressed in terms of the prices of ​ _____ year.

​​final; a​ base; ​final; that same


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