Macro Final TTU
A decrease in the required reserve ratio
Will increase the money supply
Saving equals
Y-C
Inflation Rate
[CPI(year2) - CPI(year1)] / CPI(year1) X 100
As commercial banks keep more excess reserves, money creation
Decreases
The broadest-based price index available is the
GDP deflator
Unemployment Rate
Unemployed / Labor Force X 100%
Tax Multiplier
-MPC/MPS
Investment Multiplier
1 / 1-MPC
Government Spending Multiplier
1/MPS
A prolonged and deep recession is called
A depression
The government wants to encourage consumer spending through cutting income taxes. This is an example of
A fiscal policy
A price index is
A measurement showing how the average price of a bundle of goods changes over time.
A load made by a bank is considered _______ of that bank
An asset
Unemployment means that
At the going wage rate, there are people who want to work but cannot find work
Aggregate Output is always
Equal to Aggregate Income
If the changes in the business inventories is zero, then final sales are
Equal to GDP
A period during which aggregate output rises is known as a
Expansion
If output is rising and unemployment is falling, the economy MUST be in a
Expansion
The ____ an change the quantity of money in the economy.
Federal Reserve
Final Sales
GDP-Changes in Business Inventories
Net Investment
GDP-Consumption-Gov. Purchases-exports+imports-depreciation
Traveler's checks are
Included in M1 and M2
Inflation is a
Increase in the overall price level
During recessions, government spending usually
Increases because unemployment payments increase
Firms react to unplanned in inventory reductions by
Increasing output
Profits earned in the United States by foreign owned companies are included in
The U.S. GDP but not GNP
The main disadvantage of using money as a store of value is that
The value of money actually falls when the prices of goods and services rise
If planned investment exceeds actual investment
There will be a decline in inventories
The major lesson of the circular flow diagram is that
Total income in the economy must always equal total spending
An expansion is usually associated with rising price levels.
True
Depreciation is included in GDP, but excluded from NNP
True
For you to be considered out of the labor force, you can be
a full-time retiree, a full-time student, a full-time volunteer.
A period when the economy shrinks is known as
a recession, contraction, and slump
Gross national product is the total market value of
all final goods and services produced by resources owned by a country, regardless of where production takes place.
In a business cycle, a peak represents the end of ____ and a trough represents the end of _____
an expansion; a recession
GDP
consumption+investment+gov. consumption+Net Exports
Classifying discouraged workers as unemployed would
increase the unemployment rate.
Policies designed to affect the quantity of money are
monetary policies
Discouraged workers are
not considered as part of the labor force
In the goods-and-services market, households
only demand
Gross domestic product measured in terms of the prices of a fixed, or base, year is
real GDP
If autonomous consumption increases, the size of the multiplier would
remain constant
Unemployment generally _____ during recessions and _____ during expansions
rises; falls
Gross domestic product measures
the total income of everyone in the economy, the value of all output in the economy, the total spending of everyone in the economy.
