Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

macroeconomics > 1/31 module 1 notes > Flashcards

1/31 module 1 notes Flashcards

1
Q

how do many macroeconomists view/think of economy

A

circular flow

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

circular flow

A

capture interactions between a macroeconomics two most important agents: households and firms

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

how do firms flow to households

A

goods, services and income

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

how do HH flow to firms

A

capital labor and expenditures

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

what does circular flow also feature

A

government and foreign countries

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

what are the two types of institutions macroecon consists of

A

agents and markets

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

what falls under agents

A

HH and firms

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

what falls under markets

A

goods, factors

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

what is an asset

A

good/what you own (we like this)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

liability

A

what we owe (isn’t always bad but still not as good as asset)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

assets vs

A

liabilities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

money vs

A

other assets

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

debt vs

A

equity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

what is liability often equated to

A

debt

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

what is equity (residual)

A

residual because can calculate as different between assets and debt

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Residual equity formula

A

E= A (assets) - D (debts)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

do you want a large difference between Asset and debt for residual equity

A

because large difference with more asset, so their is more equity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

demands under households

A

goods and services (in exchange for money)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

supplies under HH agent

A

labor (in exchange for wages) and capital (in exchange for interest and/or profits)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

what do you want to be small in terms of net-worth under liability

A

credit card debt, student loans, mortgage

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

example of financial asset

A

stocks/bonds

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

is labor same for everyone

A

yes, because people have same time to work but capital is different because people will work different jobs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

demands under firm agent

A

labor (in exchange for wages) and capital (in exchange for interest and/or profits)

24
Q

supply under firm agent

A

goods and services (in exchange for money)

25
Q

market is

A

place of interaction sellers and buyers will meet for a particular good or service

26
Q

what are two canonical assumptions about econ

A

law of supply and law of demand

27
Q

law of supply

A

we typically assume that a markets supply is increasing in the price

28
Q

law of demand

A

we typically assume that a markets demand is decreasing in the price

29
Q

under macro econ what is supply and demand

A

agreggate supply and demand

30
Q

aggregate supply represents

A

firm

31
Q

aggregate demand represents

A

household

32
Q

what happens to HH when interest rates are high

A

HH save more money because they are less inclines to take out loans and therefore spend less money

33
Q

N stands for

A

labor

34
Q

do firms want to employ a lot of ppl

A

no because they want to spend less on labor so they don’t hire as many workers

35
Q

what happens when Q2 is larger than Q1 on a graph

A

excess supply (surplus) so price will decrease

36
Q

equilibrium

A

a state of balance between opposing forces or actions

37
Q

what are the two well known types of equilibrium

A

walrasian/market/clearing and nash

38
Q

walrasian/market-clearing

A

supply is equal to demand

39
Q

Nash is

A

a strategic state in which no agent has an incentive to deviate from their current action

40
Q

equation aggregate demand and aggregate supply are given by

A

AS = P
AD = 10-P
(set them equal to each other)

41
Q

what are secondary agents

A

Fed, treasury, and banks

42
Q

who is responsible for setting interest rate

A

Fed

43
Q

does Fed make money

A

yes, they make money they do not spend it (so cash is placed on right side of balance sheet)

44
Q

what is the federal reserve

A

central bank responsible for managing the currency and monetary policy in the US

45
Q

dual mandate

A

promote effectively the goals of max employment, stable prices, and moderate long term interest rates

46
Q

what is reserves

A

money is system for banks

47
Q

what is gov. deposits

A

Fed is bank for government

48
Q

what do most macroeconomists want to avoid

A

deflation, last time it happened we faced recessions

49
Q

What is the US treasury

A

US finance department

50
Q

US treasury is liability because?

A

US gov debt it owes people

51
Q

what is GSE

A

gov sponsored enterprises

52
Q

what is net position

A

equity position of US gov

53
Q

banks

A

financial institutions with the access to the fed

54
Q

when banks make a loan it also initates

A

a deposit

55
Q

why are deposits a liability for banks

A

bank deposits are a liability for banks, for HH it is an asset (it is what banks owe ppl)

macroeconomics (26 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions