Economics BA(last one) Flashcards
in the United States, which component of GDP is largest?
consumer spending
How does an increase in military spending affect the domestic economy as measured by the GDP?
GDP increases
what are some examples of regressive taxes?
State sales tax and state property tax
what type of tax is the state sale tax?
reggressive
what is the main purpose of the Federal Reserve?
to control the money supply
how does inflation affect the domestic economy?
it reduces purchasing power
what will the Federal Reserve do with interest rates if there is inflation
interest rates will increase
watch type of unemployment is represented by a college graduate who does not have a job during the first month after graduating?
frictional unemployment
identify then explain why an ATM machine that replaces a bank teller will create a more permanent type of unemployment and maybe more difficult to correct?
structural unemployment
explain why the government keeps track of the consumer price index
it measures inflation
during the peak of the business cycle, what happens to unemployment?
unemployment is at a low rate
using fiscal policy, explain why the government would step in to try to increase government spending
The government may increase government spending to stop a recession
why would government spending on medical research result in lower unemployment and more economic growth
Government spending in the sector could lead to an investment in employees
using monetary policy, explain how arise in government securities would affect consumer behavior
people will buy more savings bond
what could be an unintended consequence of using corn ethanol as a alternate fuel
The price of corn increases
how has increased outsourcing affected consumers
prices aren’t as high
as the economy globalizes, what happens to quality-control
consumers have less guarantee of quality control
what impact has globalizing economy had on auto makers
it has forced the automobile industry and sellers to be more competitive
is there more interdependence or less interdependence as a result of globalization
more
what impact does globalization have on domestic jobs
one effect of globalization is a shift in the types of domestic jobs available
what is a benefit of the US dollar weakening against the euro
The US exports more goods
what is comparative advantage of trade
can produce item or efficiently than other country
what is absolute advantage of trade
is better at producing everything than another country
what is the main advantage of producing according to the concept of comparative advantage
it’s makes the most efficient use of world resources
