Economics Final

Ace your homework & exams now with Quizwiz!

a decrease in taxes will cause

AD to increase (move to the right)

an increase in confidence will cause

AD to increase (move to the right)

an increase in government spending will cause

AD to increase (move to the right)

Fiscal policy is controlled by

Congress and the President

federal tax dollars can be spent only if

Congress passes a law that the president signs and overrides a veto

doing something that is not necessarily discriminatory on its face, but impacts some groups more negatively than others is called

adverse impact discrimination

the aggregate supply-aggregate demand diagram relates various levels of

all prices as measured by the CPI and production as measured by real GDP

in a market for money

borrowers are the consumers and lenders are the suppliers

on the heritage foundation's scale of "economic freedom," the least "free" country would be that one whose economic system was purely

communist

economists measure the degree to which consumers win when Walmart comes to a city by looking at changes to

consumer surplus

the primary means by which a farmer can protect against weather related crop failure is with

crop insurance

economists consider deflation

dangerous, as it can lead to depression

the primary sources of price variability is

demand and supply variability

if the unemployment rate falls because the number of people not working but searching for work falls, economists would attribute this to the

discourages worker effect

which of the following reasons for making drugs sales illegal do economists generally see as potentially legitimate, but beyond their area of expertise?

drugs are immoral and allowing them to be sold is immoral

capital gains are those gains

earned from selling an asset for a price more than what was paid for it

if the price of a good increases by 5% and the quantity decreases by 10%, then at that price, the good is

elastic

The increase in output from point B to C is greater than the increases in output from point C to D because

eventually workers are up against the fact that there are fixed inputs and more workers do not add as much

a political problem with discretionary fiscal policy is the

expansionary bias

A mechanism by which buyers and sellers of goods and services negotiate an exchange is a

factor market

costs which do not increase with an increase in output are called

fixed costs

Fiscal policy is purposeful movements in ____ designed to direct an economy

government spending and taxes

crowding out is the idea that when

government spending increased private spending must decrease

economists timothy smelling reported that appropriately- adjusted poverty rates were

higher in the U.S. than in 8 of the 9 european countries studied

if demand is perfectly elastic, then the graph would be

horizontal

the supply and demand model examines the how prices and quantities are determined

in markets

the costs of income inequalities in an economy can be reduced to an extent if there is ____

income mobility

a higher interest rate

increases the motivation to delay consumption and, therefore, save

if the price of a good increases by 10% and the quantity decreases by 5%, then at that price, the good is

inelastic

one subject of study for macroeconomics is

inflation

the empirical finding that increased spending has no significant impact on educational outcomes

is consistent with the "flat part of the curve" on the educational production function

the percentage of government workers that ate unionized ____ the percentage of private workers that are unionized

is greater than

determining the comparative advantage of a country requires that you look at the economic notion of

opportunity cost

health care is not like other goods and services because

people go to the doctor to find out what is wrong whereas they get other services knowing more about what they need and if a newly discovered cure costs a lot we say, incorrectly, that its price has risen

without orphan drug laws

people with uncommon diseases would have little hope of companies seeking cure for their aliment

agricultural subsidies are generally

popular with politicians and unpopular with economics

the economic argument that is in a society's best economic interest to pay for the education of "someone else's child" is the

positive externalities argument

When analyzing a problem, if an economists is attempting to understand what caused something to happen without considering whether or not the action was fair or just, the economist is thinking

positively

the level of income sufficient to provide a family with a minimally adequate started of living is the

poverty line

because it costs more to live in cities than it does to live in rural areas the

poverty line is set too low in cities and too high in rural areas

because of an increase in the work-force participation rate for women, the availability of uncompensated child-care has become less available to poor women so as a consequence the fact that child-care must now be paid for suggests that the

poverty line should be revised upward to that it includes the price of child care

when the government wishes to help producers of goods by establishing the minimum price at which their good can be sold, economists call this a

price floor

publicly provided health insurance for the poor will

raise the price of health care to the non-poor and increase the totally amount of health care consumed

on a graph of real gross domestic product over time, recessions appear as

relatively short and shallow drops on an otherwise increasing path

the possibility that an investor will not receive full payment is called

risk

assuming perfect competition and at marginal revenue there will be

short and long run pressure on the price to fall

which of the following is a cost of high income inequality?

social disorder

the reasons why women are paid less than men are mainly

sociological... society imposes restrictions on some that limit their pay

externalities are effects of a transaction on

someone other than the buyer or seller

for a previously illegal good, decriminalization will cause

supply & demand to increase

limiting trade can be accomplished with

tariffs, quotas, non-tariff regulatory barriers

the EITC is a

tax credit to working poor families

though there is no tuition to public elementary and secondary schools, economists do not say that it is free because

taxpayers pick up the tab for considerable costs of education

the key difference between monopoly and oligopoly is

that there are two in oligopoly rather than one competitor in a monopoly

Economics is the study of

the allocation and use of scarce resources to satisfy the unlimited human wants

the federal reserve came into existence in response to

the boom and bust nature of the late 19th and early 20th century

when workers subdivide the tasks of a job in such a way so as to become more efficient economists refer to this as

the division of labor

the aggregate supply-aggregate demand diagram models

the economy as a whole

The statement that Congress passed a tax bill and two months later a recession began, so the bill must have been poor policy is an example of

the fallacy that correlation is the same as causation

in the market for money the price is

the interest rate

when evaluating a business decision, an economic will often resort to the use of present value because

the investment occurs in one time period and the profits in another

drug companies tend to attribute higher drug prices on

the low percentage of attempts that actually result in revenue producing drugs and high invention costs

a justification for government price supports on agriculture that economics generally accept as potentially legitimate is

the market punishes innovation

when tax filings increase faster than increases in population, and when nearly all the extra filings are from individuals in the lower 99 percent income group

the number of people in the top 1 percent group increases more than it would otherwise

an example of non discretionary fiscal policy would be

the operation of the welfare state

the inflation rate is

the percentage increase in the price index from one year to the next

the key difference between perfect competition and monopolistic competition is

the products sold are slightly different in monopolistic competition

one of the reasons economists approve of limiting trade would be

the protection of national security

the keynesian, classical and intermediate ranges apply to the

the shape of the aggregate supply curve

which of the following would be described as the recognition lag?

the time required to know that there is a recession

the poverty gap is

the total amount of money that would have to be transferred to households in poverty to lift them out of poverty

producer surplus is the area

under the price above supply curve

costs which increase with an increase in output are called

variable costs

if demand is perfectly inelastic, then the graph would be

vertical

the real balances effect suggests that

when prices are higher your buying power is less so you buy less

what output would a perfect competitor produce?

where average total cost crosses marginal revenue

assuming perfect competition which price is associated with profit being exactly normal?

where marginal cost and average total cost cross

using marginal analysis, an economist would judge the proper size of the government by comparing

whether the last dollar spent would have been better off left in private hands

if there are powerful unions in a labor market, the use of the supply and demand model to analyze labor markets

will cause you to believe that more people will be hired the there will be

if there are powerful buyers in a labor market, the use of the supply and demand model to analyze labor markets

will cause you to believe the wage will be higher than it is

which of the following reasons why women earn less than men is considered by some to be economic, and by others to be sociological?

women are more likely to choose flexible part-time employment to manage the needs of their family

those that lose from an increase in the minimum wage are

workers that are laid off

under the intermediate set assumptions of the medicare trustees report, payroll taxes ____ cover the likely increase in medicare expenses

would have to grow substantially to

over the last 31 years, costs of college tuition, room and board have increased by

629%

an increase in input prices will cause

AS to decrease (move up and to the left)

an increase in regulation will cause

AS to decrease (move up and to the left)

Production possibilities frontier models:

The choices we make in setting output alternatives

the mechanism by which buyers and sellers negotiate an exchange is called

a market

without a belief that the market has failed, which of the following will result in dead weight loss?

a price below or above equilibrium

the condition where firms want to sell more than consumers want to buy is called

a surplus

an example of discretionary fiscal policy would be

a tax cut adopted to stimulate consumption

for the minimum wage to be relevant it must be

above the equilibrium price

consumer surplus is the area

above the price under the demand curve

How does GDP deal with a Toyota produced in Kentucky?

it is fully counted

How does GDP deal with a Ford produced in Mexico?

it is not counted at all

when a firm has no competitors, in order to sell more go the good

it must reduce the price it charges

when a firm has many competitors selling the same good, in order to sell more of the good

it only needs to produce more of the good

projections of the trajectory of discretionary relative to mandatory spending made in 2014 had

mandatory spending's portion growing

medicare costs are high and rising at rapid rates because

medical technology is advancing and rising costs while the elderly pay only a quarter of the true costs and are therefore less cost conscious

the federal reserve governs U.S.

monetary policy


Related study sets

Learning Curve 3b) Language: What Develops in the First Two Years?; Surviving, and Thriving

View Set

ATI Pharmacology Made Easy 4.0 ~ The Neurological System (Part 1)

View Set

Chapter 4- Accounting 230 Smartbook

View Set

Chapter 7: Intellectual Property

View Set

History - Ch. 23 The Great Depression

View Set

Strangers to these shores 10th edition Final

View Set

Computer Science- 3D Printing Test

View Set