macro

Which of the following is an example of a public good?

a weather warning system

A person should consume more of something when its marginal

benefit exceeds its marginal cost

" Consumer sovereignty " means that

buyers determine what will be produced based on their " dollar votes " for the goods and services offered by sellers .

The industries or sectors of the economy in which business cycle fluctuations Tend to affect output most are

capital goods and durable consumer goods

Which of the following is a distinguishing feature of a command system

central planning

Fiscal policy refers to

deliberate changes in government spending and taxes to promote economic growth, full employment, and price level stability.

Transfer payments are

excluded when calculating GDP because they do not reflect current production.

The upward slope of the supply curve reflects the

law of supply

A decline in investment will shift the A.D. curve to the

left by a multiple of the change in investment.

The two main characteristics of a public good are

nonrivalry and nonexcludability

Official unemployment statistics

understate unemployment because discouraged workers are not counted as unemployed.

Suppose that tacos and pizza are substitutes , and that soda and pizza are complements . We would expect an increase in the price of pizza to A ) reduce the demand for tacos and increase the demand for soda . ( B ) reduce the demand for soda and increase the demand for tacos . C ) increase the demand for both soda and tacos . D ) reduce the demand for both soda and tacos

( B )

The interest rate affect suggest that

An increase in the price level will increase the demand for money, increase, interest rates, and decrease consumption and investment spending

The following factors explain the inverse relationship between the price level, and the total demand for output

Real balance effact, interest, rate, affect, foreign purchases affect

Attaining allocative efficiency means that

Resources are being devoted to the production of products most desired by society

A price index of

The price of a market basket in a given year divided by the price of an identical market basket in a reference year

By an " increase in demand economists mean that

The quantity demanded at each price in a set of prices is greater

The consumption schedule shows

a direct relationship between aggregate consumption and aggregate income.

When economists refer to scarcity they are referring to

a situation where what we want exceeds what we have .

In which phase of the business cycle will the economy most likely experience rising, real GDP and employment

expansion

Part-time workers who want full-time work are counted as:

fully employed and therefore the official unemployment rate may understate the level of unemployment.

The most important determinant of consumer spending is

level of income

An increase in the demand for online streaming music indicates that more is

purchased even if prices of online streaming music stayed the same.

When the price of a product rises , consumers with a given money income shift their purchases to other products whose prices are now relatively lower This statement describes

the substitution effect

The idea in economics that " there is no free lunch " means that

there are opportunity costs involved even in free lunches

if the marginal propensity to consume is 0.6 then the marginal propensity to save it must be.

0.4

If there is a surplus of a product, it's price

Is above the equilibrium level

Expansionary fiscal policy is named because

It's designed to expand real GDP

If farmers with haul some of their current corn harvest from the market, because they anticipate a higher price of corn in the near future, then this would

Leftward shift in the current supply of corn

The real balances effect on aggregate demand suggest that a

Lower price level will increase the real value of many financial assets in there for it, cause an increase in spending

The foreign purchases affect

Move the economy, a long, a fixed aggregate demand curve

The change in real GDP, resulting from an initial change in spending can be calculated by

Multiplying the multiplier by the initial change in spending

Toll, free roads, sometimes get extremely congested, such as during rush hour traffic. During those times, we would say that these roads are.

Nonexcludable and rival

If we say that a price is too high to clear the market, we mean that

Quantity supplied exceeds quantity demanded

The amount of real output that could be purchased at current prices, if all of our assets or liquidated, and the money used to purchase goods and services

Real balances affect

The market system automatically corrects a surplus condition in a competitive market by

Reducing the price of the product in question while increasing the quantity demanded

If product, why is a normal, good, and increase in consumer income will

Shift the demand curve for product Y to the right

One of the most important views expressed by classical macro economics, was that

Supply create its own demand

Consumer surplus

The difference between the maximum price consumers are willing to pay for a product in the lower equilibrium price

Which of the following is the best example of a macroeconomic statement

The high rate of inflation is reducing household buying power across the country

What would best explain why the equilibrium price of pink salmon decreased, and the equilibrium quantity increased

The increase in supply was greater than the decrease in demand.

Economic growth in a fully employed economy may be represented by

a rightward shift of the production possibilities curve

In deriving the aggregate demand curve from the aggregate, expenditures model, we note that

an increase (decrease) in the price level shifts the aggregate expenditures schedule downward (upward).

Which one of the following would increase per unit production cost, and therefore shift the aggregate supply curve to the left

an increase in the price of imported resources

Markets , viewed from the perspective of the supply and demand model ,

assume many buyers and many sellers of a standardized product

The production technique that is most efficient is the one that produces a given amount of output

at the lowest cost

When the price of oil increases significantly, the price of gasoline also increases. The ladder occurs because of a.

decrease in supply of gasoline

The relationship between quantity supplied and price is and the relationship between quantity demanded and price is

direct ; inverse

An economic system

is a particular set of institutional arrangements and a coordinating mechanism used respond to the economizing problem

Public goods are those for which there

is nonrivalry and nonexcludability.

The French term " laissez - faire " means

let it be .

The GDP price index equals

nominal GDP divided by real GDP

The aggregate supply curve is upsloping because

per-unit production cost rise as the economy moves toward and beyond its full-employment real output

The two basic markets shown by the simple circular flow model are

product and resource

Other things, equal, and improvement and productivity will

shift the aggregate supply curve to the right.

An increase in investment spending caused by a higher expected rate of return well

shift the aggregate, expenditures curve upward, and the aggregate demand curve to the right

A recessionary expenditure, Gap exists if

the aggregate expenditures schedule lies below the 45-degree line at the full-employment GDP.

Opportunity costs exist because

the decision to engage in one activity means forgoing some other activity

Graphically the market demand curve is

the horizontal sum of individual demand curves

When investment remains the same at each level of GDP in a private closed economy, the slope of the aggregate expenditures scheduled

Equals the MPC

United States would have affected the production possibilities curve

It would shift the production possibilities curve in

GDP can be calculated by summing

Personal consumption, investment, government purchases, and net exports

In representative democracy, voters are______and politicians are____

Principles, agents

The pursuit through government for special benefits at someone else's expense refers to

Rent seeking behavior

Which of the following is one of the Five Fundamental Questions

What goods and services will be produced ?

Other things, equal, and increase in the market price caused by change in supply

decrease consumer surplus

Net exports are

exports less imports

The natural rate of unemployment is the

full-employment unemployment rate

The simple circular flow model shows that

households are on the selling side of the resource market and on the buying side of the product market .

You should decide to go to a movie

if the marginal benefit of the movie exceeds its marginal cost .

The determinants of aggregate supply

include resource prices and resource productivity

Economics may best be defined as the

social science concerned with how individuals , institutions , and society make optimal choices under conditions of scarcity .

Other things, equal, if the price of a key resources used to produce product, X fails, the

supply curve a product X will shift to the right

dissaving means

that households are spending more than their current incomes.

Which of the following does not illustrate the idea of creative destruction

A firm has to destroy some of the expired products in its inventory

Which of the following is correct?

APC plus APS equals one

A table of numbers showing the total amount spent on final good and final services at different levels of real gross domestic product is

Aggregate expenditures schedule

Say, law in classical economics, suggest that over a period of time

Aggregate spending would tend to equal total output and income

Which of the following is an example of economic investment?

B & O railroad buys a new rail cars for their trains

The 2.2 trillion cares act was designed to.

Boost, aggregate, expenditures, reduce recessionary gap's, increased real GDP in employment

What is the term for the level of disposable income at which household plan to consume all their income and to save none of it

Break even income

Recurring increases and decreases in an economy's real GDP, over periods of years are called

Business cycles

Given the annual rate of economic growth, the "rule of 70 "allows one to

Calculate the number of years required for real GDP to double

Real GDP per capita

Can grow either more slowly or more rapidly than real GDP

Which of the following is the best example of a microeconomic statement

Car prices have increased recently because of a microchip shortage

Inflation caused by a rise in the prices of input is referred to as

Cost push inflation

GDP does not include which of the following activities

Couples remodeling their own homes

Savings are generated when ever

Current income exceeds current spending

If personal income taxes and business taxes increase, then this will

Decrease aggregate demand and aggregate supply

Demand side market failure occurs when

Demand curves, underreport, how much consumers are willing to pay for a good or service

The short run aggregate supply curve shows the

Direct relationship between the price level and real GDP produced

The aggregate demand curve is

Downward sloping because of the interest rate, real balances, and foreign purchases of facts

economic growth is best defined as increase in

Either real GDP or real GDP per capita

Market failure is said to occur when ever

Output is being produced for which minimum acceptable price does not equal maximum willingness to pay

When the price of a product increases , a consumer is not able to buy as much of it with a given money income . This describes the

inflationary income effect

Discretionary fiscal policy refers to

intentional changes in taxes and government expenditures made by Congress to stabilize the economy.

All else equal, a large decline in the real interest rate will shift the

investment schedule upward.

Modern economic growth refers to countries that have experienced an increase in

output per person

Which of the following is a feature of laissez faire capitalism

people are free to interact in markets to buy and sell goods and services

The largest expenditure component of GDP is

personal consumption expenditures