Macro Review For Final

Lakukan tugas rumah & ujian kamu dengan baik sekarang menggunakan Quizwiz!

Unemployment Rate

(# of unemployment/labor force) x 100

Nominal GDP formula

(Nom.)GDP= C+Ig+G+Xn

The change in consumption (MPC) is .8. What is the multiplier?

5

Rule of 70

A method for determining the number of years it will take for some measure to double, given its annual percentage increase. Example: To determine the number of years it will take for the price level to double, divide 70 by the annual rate of inflation.

Dual Mandate

Achieving full-employment rate of unemployment 3-4% Achieving the Fed's target rate of inflation 2%

Mixed Open GDP formula

C+Ig+Xn+G=GDP

Private Open GDP formula

C+Ig+Xn=GDP

Private Closed GDP formula

C+Ig=GDP

Why do Nations trade

Distribution of resources uneven Efficient production requires different technologies Products are differentiated

Production Possibilities Model definition

Economic model that shows different combos of 2 goods that an economy can produce

Damand-Pull inflation

Excess spending relative to output

Increase gov. spending

Expansionary fiscal policy

Money supply rises, interest rates...

Fall

If the Fed. sells bonds, monetary supply

Falls

Multilateral Trade Agreements

General Agreement on Tariffs and Trade (GATT) World Trade Org. (WTO) European Union (EU) North American Free Trade Agreement (NAFTA)

Mixed includes

Ig and G

Short Run

Input prices fixed, Output vary

Immediate Short Run

Input/Output prices fixed

Long Run

Input/Output prices vary

Interest Rates and Bonds have a _______ relationship.

Inverse

Functions of Money

Medium of Exchange Unit of Account Store of Value

Decrease Money Supply

Monetary Policy

Monetary Policy

Monetary policy addresses interest rates and the supply of money in circulation, and it is generally managed by a central bank.

Contractionary Fiscal Policy

Policy designed to decrease aggregate demand and combat demand-pull inflation

Expanisonary Fiscal Policy definition

Policy designed to increase aggregate demand and raise real GDP

How we measure how economy is doing

Real GDP Unemployment Inflation

Decrease money supply

Restrictive Monetary policy

If the Fed. buys bonds, monetary supply...

Rises

Aggregate Supply

Schedule/curve showing relationship between nation's price level and amount of real domestic output firms produce

Aggregate Demand

Schedule/curve that shows amount of nation's output that buyers collectively desire to purchase at each possible price level.

Increase gov. spending does what

Shift Aggregate demand right

Increase money supply does what

Shifts Aggregate Demand right

Increase taxes does what

Shifts Aggregate demand left

Decrease money supply does what

Shifts Aggregate demand to the left

Expansionary Fiscal Policy does what

Shifts Aggregate demand to the right

Who implements monetary policy

The Feds.

Who implements Fiscal Policy

The Government

T?F We need to increase/decrease taxes by an amount larger than our GDP gap.

True

As disposable income increases both consumption and saving

increase

If the federal reserve system buys government securities

interest rates on securities will fall

Demand-pull inflation is shown as

rightward shift in AD curve along with upsloving AS curve

4 stages of business cycle

Trough Peak Recession Expansion

Increased Money Supply

Expansionary Monetary Policy

Increase Gov. Spending

Fiscal Policy

Increase taxes

Fiscal Policy

Fiscal Policy

Fiscal policy addresses taxation and government spending, and it is generally determined by government legislation.

Types of Unemployment

Frictional Structural Cyclical

Opportunity Cost

Giving something up for something else

MPS

Change in saving/change in income

Increase Taxes

Contractionary fiscal policy

Income Approach

Count income derived from product

Expenditures Approach

Count sum of money spent buying the final goods

The change in consumption (MPC) is .75. What is the Multiplier?

4

Cost-Push inflation

Caused by rise in per-unit production costs

MPC

Change in consumption/change in income

Mixed Closed GDP formula

C+Ig+G=GDP

Savings Schedule

Table showing how much households PLAN TO SAVE

Consumption Schedule

Table showing how much households PLAN TO SPEND

Productions Possibilities Model (X and Y axis)

X= Consumer goods Y= Capital goods

Open includes

Xn


Set pelajaran terkait

OB: Postpartum Assessment and Nursing Care

View Set

BEC Preliminary Vocabulary List (English- German)

View Set

Pediatric Success Neuromuscular or Muscular Disorders

View Set

Info Literacy Test: Focus On http://libguides.weber.edu/c.php?g=629813&p=4395783

View Set

Government Final (Multiple Choice)

View Set

ITEC Networking & Immersive Reality

View Set

Pharmacology Test #2- Dyslipidemia and Antiarrthymics

View Set

10/10 final (take/get/go/do 3, 4, 5, 6)

View Set

Ch 17 Resp. System drugs & Ch 30 Asthma & COPD

View Set