Econ test CH 8-19 Flashcards
Comparative advantage
One group produces more than the other
Economic development is important in countries because
Reduces poverty and increases social and political stability
Connection between money and interest rates
Contraction of money supply= higher interest rates
For whose guidance was the council of economic advisers created
The US president
Which of these is a prominent feature of monetary policy
Adjusting interest rates to stimulate the economy
Progressive income tax is an example of
An automatic stabilizer
In Keynes’s view, a short term budget deficit due to government spending or tax cuts is
Sometimes necessary to help stimulate the economy
GDP= C+ I + G + (X-M). G stands for:
Government spending
If there is an increase in federal tax rates, then it was caused by
Congress
Which type of tax is levied on the sale of an asset held for 12 months or longer
Capital gains tax
What would happen to the economy if it were not interrupted by alternating periods of recession and recovery
Trend line
The federal deposit insurance corporation was created to
Restore public confidence in America’s financial industry
Intermediate product
Products used in the production process to make other goods
An import quota will result in
An increase in domestic employment
Which of these is true of US fertility rate at present
Slightly below the replacement population rate
Name of fee paid for an insurance policy
Premium
Something that is used for money but also has intrinsic value in some other use is known as
Commodity money
Which of the following can cost you money in large interest payments
Credit card
In collective bargaining, who represents the interests of the workers
Elected union officials
A combination of firms involved in different steps in manufacturing or marketing is known as
Vertical merger
A combination of firms producing the same kind of product is known as a
Horizontal merger
The government document that grants permission to establish a corporation is called a
Charter
According to the theory of comparative advantage, a nation should
Produce and export goods that have low opportunity costs
A government order prohibiting the movement of goods to a country is known as an
Embargo
GPD= C+ I+ G+ (X-M) What does the “I‘ stand for?
Investment
What are the feds three main tools for conducting monetary policy
The reserve requirement, open market operations, and the discount rate
Which of the following groups does supply side policy target through stimulation
Producers
Policies based on demand side economics is sometimes referred to as
Keynesian economics
As a result of a progressive tax system, as incomes increase, the average tax rate will
Increase
Elementary schools, police departments, and electrical service are typically paid for by
Local governments
The sum of all persons under age sixteen and above who are either employed or actively seeking employment is known as
The civilian labor force
Inflation characterized by rising input costs, especially energy and organized labor, driving up the cost of production
Cost push inflation
Members of the federal reserve board of governors are rarely subject to political pressure because
They are appointed by the president to 14 year terms
Federal reserve can change the money supply except by
Changing current tax rate
Which activity is illegal with a right to work law
Requiring union membership
