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Academic Decathlon > economics 601-675 > Flashcards

economics 601-675 Flashcards

1
Q

what are the 6 powers granted to the fed reserve by congress?

A

conduct monetary policy, supervise financial institutions, lend money to financial institutions, serve as a bank for the government, issuer currency,provide services to financial institutions

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2
Q

How does the government generally aim to achieve monetary targets?

A

through manipulation of interest rates via the Federal Reserve

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3
Q

What does the Federal Reserve do to help achieve the economic goals stated in the Full Employment and Balanced Growth Act of 1978?

A

The Fred manipulates the money supply.

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4
Q

when economists refer to “the money supply” to which category of money are they normally referring

A

m1

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5
Q

you take out a loan in the amount of $25,000 and end up paying $50,000 over the course of 30 years. what is the principal

A

$25,000

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6
Q

about how much cash is there in circulation per citizen in the us economy

A

$1,500

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7
Q

what does inflation do to the value of money

A

inflation devalues money

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8
Q

prices in kosovo are measured in kumquats. kumquats are being used as a (medium of exchange/ unit of account/ store of value)

A

unit of account

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9
Q

according to the phillips curve, low inflation corresponds to _____ unemployment

A

high

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10
Q

if inflation is at 4%, what nominal interest rate must a lender charge to earn a real interest rate of 5%

A

9%

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11
Q

what is disinflation

A

a decrease in the inflation

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12
Q

high employment + high inflation =

A

stagflation

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13
Q

an unanticipated decrease in the rate of inflation benefits (credits/debtors/ neither)

A

creditors

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14
Q

what is a time deposit

A

money that must be held in a deposit for a certain length of time, usually in exchange for additional interest

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15
Q

m3 consists of what elements

A

m2 plus eurodollars, time deposits of over $100,000 and certain money market funds which take a long time to return money to investors

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16
Q

what are some important characteristics of money if it is to fulfill its roles

A

portability, recognizability, durability, difficulty of duplication

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17
Q

if nomal gdp is $300 billion, and the gdp deflator is 200, what is real gdp

A

$150 billion

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18
Q

what is the prime rate

A

the interest rate that banks charge their most credit-worthy customers for short term loans

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19
Q

define stagflation

A

a period of high unemployment in a time of high inflation

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20
Q

define “Cost-push inflation”

A

cost-push inflation is the result of rising production costs, which force producers to raise the selling prices of their goods

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21
Q

define deflation

A

a decrease in general price levels

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22
Q

mortgage rates have general (increased/decreased) since the early 1980sw

A

decreased

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23
Q

how are the different categories of money, such as m1 and m2, divided

A

according to liquidity

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24
Q

according to the phillips curvre, high inflation corresponds to ____ unemployment

A

low

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25
Q

what is deflation

A

a general decrease in price levels

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26
Q

at higher interest rates, individuals borrow (less/more) money

A

less

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27
Q

l consists of what elements

A

m3 plus savings bonds, government securities, commercial paper and other obscure financial instruments

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28
Q

what is the wealth effect as related to inflatoin

A

if the price level decreases, people have more money to spend on more things; its as though they are wealthier

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29
Q

what curve graphically represents an inverse relationship of inflation and unemployment

A

the phillips curve

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30
Q

what are the two primary markets in the circular flow model of an economy?

A

product and resource markets

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31
Q

using the income approach how id GDP calculated?

A

GDP= Consumption + investment + government spending + net exports

32
Q

what is the index of leading economic indicators?

A

a weighted index of twelve economic measurements that can indicate the general direction in which economic growth is moving

33
Q

why is an import leak from the money flow

A

money leaves our country in exchange for product from another country

34
Q

which sector is on the demand side of the factor markets n the circular flow model

A

the business sector

35
Q

in a nation of subsistence farmers is GDP per capita an accurate measure of quality of life?

A

probably not

36
Q

explain how consumer sovereignty works

A

consumers have needs for resources, good, or services, and their demand gets the circular flow model going

37
Q

the decision between guns and butter is a classic example of which basic economic question

A

what to produce

38
Q

what do firms pay for the factors of production

A

wages, rents, salaries

39
Q

hw much was the US nominal GDP in 1990

A

over $5.74 trillion

40
Q

the business cycle is graphed as a measure of changes in _____ over time

A

GDP

41
Q

how much was the median household income of white household in the IS in 1999

A

$42,504

42
Q

name the three types of economic indicators

A

lading indicators, lagging indicators, and concurrent indicators

43
Q

the choice between mass-production and small-scale production is an example of which basic economic question?

A

how to produce

44
Q

the rate and magnitude of the circular flow can be equated to ____

A

GDP

45
Q

aggregate demand measures the relationship of ______

A

rice level to quantity of output in an entire economy

46
Q

the number of new housing permits issued is a (leading/concurrent/lagging) economic indicator

A

leading

47
Q

if real flow runs counter-clockqise in the circular flow model, in which direction does money flow?

A

clockwise

48
Q

on a graph of aggregate demand, what does the vertical axis represent?

A

gross domestic product

49
Q

what is the most meaningful measure of economic growth?

A

per capita GDP

50
Q

True or false: if people think price levels are going to fall in the future, they spend less now, bringing down aggregate demand

A

true=in fact, this actually helps lower the price level !!!!!!!!

51
Q

what does it mean for aggregate supply to be in the classical range?

A

it means that an increase in aggregate demand will result in an equilibruim of higher prices but no greater quantity of economic output

52
Q

between 1990 and 1998 by what percent did real gross domestic product grow in the US

A

23.10%

53
Q

What provides the “grease” that helps the economy run smoother by making exchanges easier?

A

money

54
Q

Most day-to-day transactions take place with what form of money?

A

demand deposits

55
Q

Interest rates are the cost of (consumption or investment)

A

investment

56
Q

Derived demands are demands for what

A

factors of production

57
Q

The demand for labor is an example of a ______ demand

A

derived

58
Q

A farmer buys farmland solely for the purpose of growing wheat. The demand for the (farmland or wheat) is a derived demand

A

farmland

59
Q

What term refers to the demand for an input?

A

derived demand

60
Q

The term derived demand refers to (consumer or producer) demand

A

producer

61
Q

The economic term “rent” refers to the price of a factor of production whose supply is perfectly (elastic or inelastic)

A

inelastic

62
Q

Explain the difference between the terms “rent” or “rental”

A

“Rent” is the payment for a factor with a fixed supply, such as land. “Rental” is the price paid for any good or service over a period of time

63
Q

Rent is the price paid for which factor of production

A

land

64
Q

What economic term refers to payments for labor?

A

wages

65
Q

What does a producer pay for the use of labor?

A

wages

66
Q

What does the producer pay for the use of a capital resource?

A

interest

67
Q

What is the reward for entrepreneurship?

A

profit

68
Q

What does the producer pay for the use of natural resource?

A

rent

69
Q

The degree of income inequality in the United States has (increased or decreased) since the beginning of the 20th century

A

decreased

70
Q

What is a productivity-adjusted wage?

A

a wage rate based on the number of units produced

71
Q

What does the Lorenz curve measure?

A

inequality among income classes

72
Q

What is the measurement of output per unit of input?

A

productivity

73
Q

If a firm improves its productivity, are prices likely to fall?

A

yes

74
Q

If input remains the same, but output increases, does productivity increase, decrease or stay the same?

A

it increases

75
Q

What is human capital?

A

education, skills, and training of laborers

Academic Decathlon (35 decks)

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