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economics 451-525 Flashcards

1
Q

the length of the average work week is a (leading/concurrent/lagging) economic indicator

A

leading

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2
Q

which actor is on the demand side of the product market in the circular flow model

A

the household sector

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3
Q

are used car sales included in gap measurement

A

no

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4
Q

the equation mv=pq is known as the equation of

A

exchange

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5
Q

what does m stand for in the equation of exchange

A

money supply

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6
Q

what does v stand for in the equation of exchange

A

velocity of money

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7
Q

to increase the money supply in the economy, the federal reserve can (sell or buy) government bonds

A

buy

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8
Q

what is the discount rate

A

the interest rate the federal reserve charges banks to borrow money

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9
Q

what is the federal funds rate

A

the rate banks charge one another on loans

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10
Q

who is represented on the federal advisory council

A

member banks elect one representative per district

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11
Q

how long does each member of the federal advisory council hold office

A

each one is elected to a one year term and convention has it that each serves three consecutive one year terms

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12
Q

open market operations are the buying and selling of

A

government bonds

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13
Q

the reserve ratio is fifty percent what is the simple money multiplier

A

2

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14
Q

the reserve ratio is ten percent how much money is created from fifty dollars

A

500 dollars

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15
Q

how often and where does the federal advisory council meet

A

four times each year in washington dc

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16
Q

the higher the reserve ratio, the (higher/lower) the money multipler

A

lower

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17
Q

banking that employs a reserve ratio is known as _ banking

A

fractional reserve

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18
Q

the reserve ratio is 25% what is the simple money multiplier

A

4

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19
Q

what is the reserve ratio

A

the percentage of deposits that banks must hold on reserve

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20
Q

who sets the reserve ratio

A

the federal reserve

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21
Q

how does the reserve ratio relate to money multiplication

A

money in excess of required reserves can be loaned out to individual and then spent, deposited, and loaned out again

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22
Q

what does the phrase you cant push on a string mean with regard to monetary policy

A

it is east to slow down the economy through monetary policy, but harder to speed it up since for example high interest rates definitely discourage borrowing but low interest rates may not interest depressed consumers

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23
Q

what is the marginal propensity to consume

A

the percentage of each additional dollar an individual receives that he or she spends

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24
Q

what is an automatic stabilizer

A

an automatic stabilizer is a feedback mechanism that adjusts automatically offset a decrease or increase in aggregate demand. For instance unemployment insurance helps keep demand up during a recession by providing the unemployed with spending money

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25
Q

what is moral suasion with regard to the federal reserve

A

moral suasion occurs when the federal reserve pressures banks to act in a certain way

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26
Q

what is the margin requirement with regard to stock purchases

A

if you buy 100$ share of stock with 10$ of your own money and 90$ borrowed from your stockbroker you are buying stock on the margin the federal reserve can control how much you need to put in cash

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27
Q

what does regulation q allow the federal reserve to do

A

it allows the federal reserve to set the top interest rate that can be paid out by a bank to consumers

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28
Q

TRRUE OR FALSE; IN PERFECTLY COMPETITIVE MARKETS, SELLERS HAVE A POSITIVE INCENTIVE TO SELL BELOW THE PRICE OF THEIR COMPETITORS

A

FALSE

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29
Q

IN A MONOPOLISTIC COMPETITIVE MARKET PRICES FALL WITHIN A (WIDE/NARROW) RANGE

A

NARROW

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30
Q

WHAT DOES PERFECT INFORMATION MEAN

A

ALL CONSUMERS AND PRODUCERS HAVE ACCESS TO ALL INFORMATION ABOUT PRICE AND AVAILABILITY OF THE PRODUCT AND ABOUT ONE ANOTHER

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31
Q

ADVERTISING ISAN IMPORTANT STRATEGY IN WHICH TWO MARKET STRUCTURES

A

MONOPOLISTIC COMPETITION AND OLIGOPOLY

32
Q

WHAT FACTOR IN A MARKET AFFECT THE LEVEL OF COMPETITION

A

NUMBER OF BUYERS AND SELLERS, NO BARRIERS TO ENTRY OR EXIT, HOMOGENEOUS PRODUCT, PERECT INFORMATION

33
Q

IS PROFIT GUARANTEED TO A REGULATED MONOPOLY

A

NO

34
Q

A MARKET IN WHICH ONLY ONE FIRM PROVIEDS THE GOOD OR SERVICE IS A…

A

MONOPOLY

35
Q

WHAT ARE THE CHARACTERISTICS OF AN OLIGOPOLY

A

A FEW LARGE SCALE SELLERS, HOMOGENEOUS OR SLIGHTLY DIFFERENTIATED PRODUCTS, MUTUAL INTERDEPENDENCE, STEEP BARRIERS TO ENTRY

36
Q

IS A MONOPOLY A PRICE TAKER

A

NO A MONOPOLY IS A PRICE SEARCHER SEEKING OUT THE PRICE AT WHICH IT CAN EARN THE MOST PROFIT

37
Q

SPECIFICALLY CHARACTERIZE THE STRUCTURE OF THE MARKET FOR PUBLIC UTILITIES

A

NATURAL MONOPOLY

38
Q

IF ONE FIRM DECIDES TO CHARGE MORE IN PERFECT COMPETITION WHAT HAPPENS

A

CONSUMERS BUY FROM OTHER PRODUCERS AND THE FIRM’S SALES PLUMMET TO ZERO

39
Q

WHAT TERM REFERS TO WHAT HAPPENS WHEN A MONOPOLY FIRM WITHHOLDS GOODS FROM CONSUMERS IN ORDER TO RAISE THE PRICE

A

CONTRIVED SCARCITY

40
Q

WHY ARE MONOPOLIES CRITICIZED

A

THEY CAN CHARGE MORE FOR THEIR PRODUCTS, THEY CAN AFFORD TO BE LESS RESPONSIVE TO CONSUMER DESIRE, THEY BLOCK COMPETITORS FROM ENTERING THE MARKET

41
Q

A MONOPOLY HAS…. SELLERS

A

ONE

42
Q

MARKETS WITH (HIGH/LOW) BARRIERS TO ENTRY OFTEN RESULT IN MONOPOLIES

A

HIGH

43
Q

WHAT TYPE OF MARKET STRUCTURE HAS ONLY ONE SUPPLIER

A

MONOPOLY

44
Q

WHAT DO YOU CALL THE EXCLUSIVE LEGAL RIGHT TO CONTROL INTELLECTUAL PROPERTY

A

A COPYRIGHT

45
Q

WHAT IS THE DIFFERENCE BETWEEN A PRICE TAKER AND A PRICE SEARCHER

A

PRICE TAKERS SELL AT THE MARKET PRICE, WHATEVER IT HAPPENS TO BE; PRICE SEARCHERS SELL AT THE POINT OF PROFIT MAXIMIZATION

46
Q

what does it mean for products in perfect competition to be homogeneous

A

the goods provided by different producers are essentially identical

47
Q

can a patent or copyright create a natural monopoly

A

yes

48
Q

what do you call the exclusive legal right to make or sell an invention for a given period of time

A

a patent

49
Q

is dynamic efficiency a positive or negative result of monopolies

A

dynamic efficiency is generally considered positive. firms have more resources available with which to develop technology and improve resources

50
Q

if one firm in an oligopoly raises its prices, other firms tend to (ignore/match) this increase

A

ignore

51
Q

true or false. in perfectly competitive markets, all sellers are price takers

A

TRUE

52
Q

are new car sales included in GDP measurement?

A

yes

53
Q

how much was the median household income of asians and pacific islanders in 1999?

A

$51,205

54
Q

in the circular flow model, what is the real flow?

A

resources, goods, and services

55
Q

define “recession”

A

a recession is in effect when output falls at least two consecutive quarters

56
Q

exports are (leaks from/injections into) the money flow

A

injections into

57
Q

short-run growth of output is cyclical, but long-run growth general (increases/decreases).

A

increases

58
Q

government is one answer to which basic economic question?

A

who will receive the benefits of production

59
Q

the money supply is a (leading/concurrent/lagging) economic indicator

A

leading

60
Q

if you mow your parents lawn for free, is it included in GDP measurement?

A

no

61
Q

what is the difference between the real flow and the money flow?

A

the real flow is the direction of resources, goods, and services moving from the household sector to the business sector and back again. the money flow is the direction of money (opposite the direction of real flow) as it is used to acquire resources, goods, and services

62
Q

are social security payments directly included in GDP measurement?

A

no

63
Q

according to classical economics, for how long can the business cycle persist?

A

indefinitely

64
Q

income is (leading/concurrent/lagging) economic indicator

A

concurrent

65
Q

whose economic law favors supply-side economic thinking?

A

say’s law

66
Q

is the sale of stocks included in GDP measurement?

A

no

67
Q

a change in price level causes the aggregate supply to (increase/decrease/stay the same)

A

stay the same

68
Q

how does the government enter the circular flow of an economy?

A

money leaks from the circular flow to the government in the form of taxes; the government injects money into the real flow through transfer payments and direct spending

69
Q

which racial group earned the highest median household income in the U.S. in 1999?

A

asians and pacific islanders

70
Q

are black market transections included in GDP measurement?

A

no

71
Q

t at higher price levels, people demand a (smaller/greater) quantity of output from the economy?

A

smaller

72
Q

employment is a (leading/concurrent/lagging) economic indicator

A

concurrent

73
Q

true or false: if firms expect they will have greater income in the future, they will invest more now, decreasing aggregate demand

A

TRUE

74
Q

at what point do the aggregate supply and aggregate demand curves intersect?

A

at the equilibrium price level

75
Q

is the resale of homes included in GDP measurement?

A

no

Academic Decathlon (35 decks)

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