Brainscape's Knowledge GenomeTM

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


See full index

Economics > FINAL > Flashcards

FINAL Flashcards

1
Q

GDP

A

gross domestic product

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

the market value of all goods and services produced in a country at any given time

A

GDP

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

GDP formula

A

Y=C+G+I+NX

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

what does C stand for in the GDP formula

A

consumption the spending by households on goods and services, with the exception of purchases of new housing include durable goods and non durable goods D: automobiles and appliances ND: food and clothing

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

what does the G stand for in the GDP formula

A

government spending spending on goods and services by local, state, and federal governments ex. salaries of gov’t workers (army general or school teacher) and expenditures on public works NOT classified as gov’t spending: paying social security to retired person or unemployment insurance benefit to someone who was laid off

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

what does the I stand for in the GDP formula

A

investments the purchase of goods that will be used in the future to produce more goods and services the sum of purchases of business capital, residential capital, and inventories BC: business structures, equipment, and intellectual property products RC: ex. landlords apartment building and a homeowners personal residence I:

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

what does the NX stand for in the GDP formula

A

net exports foreign purchases of domestically produced goods minus the domestic purchases of foreign goods

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

the production of goods and services valued at constant prices accounts for inflation uses base yr price level measures in physical units

A

real GDP

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

the production of goods and services valued at current prices does not account for inflation uses their own price levels measures in #$ units

A

nominal GDP

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

GDP deflator formula

A

(nominal/real) x100

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

GDP inflation

A

(deflator 2-deflator1/deflator1)

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

CPI means

A

consumer price index

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

measure of goods bought by average customer

A

CPI

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

basket price formula

A

(P x Q) + (P x Q) + (P x Q) etc

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

CPI formula

A

(basket price/base yr basket price) x 100

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

CPI calculated w inflation

A

(CPI2-CPI1/CPI1) x 100%

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

CPI correcting inflation

A

(price level today/price level base) basket price

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

financial system lenders

A

you putting money in the bank

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

financial system borrowers

A

needing loans

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

financial systems intermediate

A

the bank

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

unemployment

A

anyone who doesnt have a job but is looking for one

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

labor force

A

employed and unemployed

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

adult population

A

anyone over 18 employed + unemployed + not in work force

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

how many types of unemployment are there

A

3

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

cyclical unemployment

A

the deviation of unemployment from its natural rate rates go up and down

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

structural unemployment

A

results because the number of jobs available in some labor markets is insufficient to provide a job for everyone who wants one not enough seats to fill

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

frictional unemployment

A

the unemployment that results from the process of matching workers and jobs often though to explain relatively short spells of unemployment haven’t found the perfect job yet

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

why is it bad for unemployment to be at 0%?

A

inflation goes up we are not filling all jobs people are not cycling through jobs–> transferring

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

what does the federal reserve do?

A

control money supply and monetary policy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

how does the federal reserve influence money supply??

A

by buying and selling bonds

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

how does the federal reserve buy and sell bonds?

A

through open market operations bonds adjust money supply

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

how do bonds adjust money supply?

A

they decrease by selling bonds (money out of system) increase by buying bonds (money in system)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

what is the reserve ratio?

A

the fraction of the banks deposit that keeps safe

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

what is the formula for money multiplier?

A

1/RR(.10)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

reserve ratio=

A

10%

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

reserve ratio ex. $10

A

for every dollar spent, $10 is added to the money supply

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

money multiplier effect happens____

A

in a chain

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

mm= the bank has to ____

A

maintain capital amount (how much they keep in safe)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

federal funds rate

A

the short-term rate to overnight money

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

money supply is dictated by ___

A

the feds

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

supply and demand: nominal is measured in

A

$ units

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
42
Q

supply and demand: real is measured in

A

physical units

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
43
Q

classical dichotomy

A

the theoretical separation of nominal and real variables

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
44
Q

velocity of money

A

the rate at which money changes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
45
Q

velocity of money formula

A

V= PY/M

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
46
Q

for the velocity of money formula, what is P? P= price level

A

GDP deflator

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
47
Q

for the velocity of money formula, what is Y output?

A

real GDP

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
48
Q

for the velocity of money formula, what is M?

A

quantity of money

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
49
Q

quantity formula

A

MV=PY

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
50
Q

quantity formula: MV=

A

monetary policy value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
51
Q

quantity formula: PY=

A

value of output

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
52
Q

Which of the following does NOT add to U.S. GDP? a. Air France buys a plane from Boeing, the U.S. aircraft manufacturer. b. General Motors builds a new auto factory in North Carolina. c. The city of New York pays a salary to a policeman. d. The federal government sends a Social Security check to your grandmother.

A

the federal government sends a social security check to your grandmother bc shes retired and its social security

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
53
Q

An American buys a pair of shoes manufactured in Italy. How do the U.S. national income accounts treat the transaction? a. Net exports and GDP both rise. b. Net exports and GDP both fall. c. Net exports fall, while GDP is unchanged. d. Net exports are unchanged, while GDP rises.

A

net exports fall, while GDP is unchanged

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
54
Q

The consumer price index (CPI) measures approximately the same economic phenomenon as a. Nominal GDP b. Real GDP c. The GDP Deflator d. The Unemployment Rate

A

the GDP deflator

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
55
Q

Which of the following best describes the catch-up effect? a. The property whereby the benefit from an extra unit of input declines as the quantity of the input increases. b. The property whereby countries that start off poor tend to grow more rapidly than countries that start off rich. c. The quantity of goods and services produced from each unit of labor input. d. Society’s understanding of the best ways to produce goods and services.

A

The properties whereby countries that start off poor tend to grow more rapidly than countries that start off rich

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
56
Q

How does the Fed increase the money supply in the economy using Open Market Operations? a. Buying Bonds b. Selling Bonds c. Increasing Inflation d. Decreasing the Reserve Ratio

A

buying bonds

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
57
Q

The Federal Reserve sets a reserve ratio at 10% (0.10) for all banks. What will the money multiplier be? MM=1/RR=(1/.10) = 10

A

MM= 1/RR MM= 1/.10= 10

58
Q

T or F: GDP is the market value of all final intermediate goods produced within the United States during a given time period.

A

false

59
Q

Y/N: will this increase the U.S. GDP? A United States-based company in New York City opens a plant in Viet Nam that produces all of their good.

A

no

60
Q

Y/N: will this increase U.S. GDP? Samsung, a Korean company, produces their phones in Korea and ships them to the United States to be sold.

A

no

61
Q

Y/N: will this increase U.S. GDP? A stay at home mom in Montana starts babysitting for the local community and gets paid.

A

yes

62
Q

Y/N: will this increase U.S. GDP? A local lawyer that usually makes $110/hour takes a pro bono case to help a struggling family in New Jersey.

A

no

63
Q

Y/N: will this increase U.S. GDP? A businessman in Los Angeles decides to invest more assets into technological stocks.

A

no

64
Q

Y/N: will this increase U.S. GDP? The U.S. Congress signs a bill funding the creation of 1,000 new federal job positions.

A

yes

65
Q

Y/N: will this increase GDP? A local consulting firm decides to invest in the construction of a new office space. [

A

yes

66
Q

Y/N: will this increase GDP? 20,000 textbooks are sold to schools in Germany by a U.S. textbook company.

A

yes

67
Q

Y/N: will this increase GDP? A local gamer buys a new steady state hard drive from Japan.

A

no

68
Q

Y/N: will this increase GDP? A U.S. shoe company produces shoes in China that are then sold in the United States.

A

no

69
Q

Which of the following is a better indicator of economic well-being? a. Nominal GDP b. Real GDP c. GDP deflator d. Inflation rate

A

Real GDP

70
Q

GDP is an imperfect measure of a country’s well-being because it does not capture a. how much a country spends on goods b. how much leisure time a country takes c. the amount of government involvement in the economy d. GDP is a perfect measure of well-being.

A

how much leisure time a country takes

71
Q

An American buys a Korean made car. How do the U.S. national income accounts treat the transaction? a. Net Exports fall and GDP is unchanged b. Net Exports and GDP both fall c. Net Exports and GDP both rise d. Net Exports are unchanged and GDP rises

A

net exports fall and GDP is unchanged

72
Q

the GDP deflator measures roughly the same economic phenomenon as ______.

A

CPI

73
Q

Suppose the government wants to reduce the type of unemployment from the previous question. Which of the following policies would help achieve this goal? Check all that apply. a. Improving a widely used job-search website so that it matches workers to job vacancies more effectively b. Extending the number of weeks for which unemployed workers are eligible for unemployment insurance benefits from the government c. Establishing government-run employment agencies to connect unemployed workers to job vacancies d. Decrease government spending

A

a. improving a widely used job-search website so that it matches workers to job vacancies more effectively c. establishing government-run employment agencies to connect unemployed workers to job vacancies

74
Q

fisher effect formula for real interest rate

A

RIR= nominal interest rate- inflation rate

75
Q

productivity

A

the quantity of goods and services produced from each unit of labor input

76
Q

why is productivity important?

A

ex. crusoe if he is good at catching fish, growing vegetables and making clothes, he lives well. if he is bad, he lives poorly. if he gets to consume only what he produces, his living standards are tied to his productivity

77
Q

how is productivity determined?

A

physical capital per worker human capital per worker natural resources technological knowledge

78
Q

physical capital

A

the stock of equipment and structures used to produce goods and services

79
Q

factors of production

A

the inputs used to produce goods and services

80
Q

human capital

A

the economists term for the knowledge and skills that workers acquire through education, training, and experience raises a nation’s ability to produce goods and services includes the skills accumulated in early childhood programs, grade school, high school, college, etc

81
Q

natural resources

A

inputs into production that are provided by nature, such as lands, rivers, and mineral deposits take two forms: renewable and nonrenewable

82
Q

technological knowledge

A

the understanding of the best ways to produce goods and services takes many forms- common knowledge or proprietary

83
Q

diminishing returns

A

the property whereby the benefit from an extra unit of an input declines as the quantity of the input increasees

84
Q

catch-up effect

A

the property whereby countries that start off poor tend to grow more rapidly than countries who start off rich

85
Q

bond

A

certificate of indebtedness that specifies the obligations of the borrower to the holder of the bond

86
Q

financial markets

A

the institutions through which a person who wants to save can directly supply funds to a person who wants to borrow

87
Q

financial intermediaries

A

financial institution through which savers can indirectly provide funds to borrowers

88
Q

mutual fund

A

an institution that sells shared to the public and proceeds to buy a selection, or portfolio, of various types of stocks, bonds, or both stocks and bonds

89
Q

formula for savings

A

S= (Y - T - C) + (T - G)

90
Q

private savings

A

the amount of income that householders have left after paying their taxes and paying for their consumption

91
Q

public savings

A

the amount of tax revenue that the government has left after paying for its spending

92
Q

budget surplus

A

when the government receives more money than it spends

93
Q

budget deficit

A

when the government spends more than it receives in tax revenue

94
Q

natural rate of unemployment

A

the normal rate of unemployment around which the unemployment rate fluctuates

95
Q

unemployment insurance

A

government program that partially protects workers’ incomes when they become unemployed unintentionally increases the amount of frictional unemployment

96
Q

collective bargaining

A

the process by which unions and firms agree to the terms of employment

97
Q

efficiency wages

A

above-equilibrium wages paid by firms to increase worker productivity one of the reasons why economies always experience some unemployment (along with job search, minimum-wage laws, and unions)

98
Q

what are the different types of efficiency wages?

A

worker health worker turnover worker quality worker effort

99
Q

what is money’s three functions in the economy?

A

medium of exchange unit of account store of value

100
Q

medium of exchange

A

an item that buyers give to sellers when they purchase goods and services

101
Q

unit of account

A

the yardstick people use to post prices and record debts

102
Q

store of value

A

an item that people can use to transfer purchasing power from the present to the future

103
Q

what are the two different kinds of money?

A

commodity money and fiat money

104
Q

commodity money

A

when money takes the form of a commodity with intrinsic value intrinsic- the item would have value even if it were not used as money

105
Q

fiat money

A

money without intrinsic value established as money by government decree

106
Q

the federal reserve

A

the agency that is responsible for regulating the system of fiat money

107
Q

central bank

A

an institution designed to oversee the banking system and regulate the quantity of money in the economy

108
Q

who runs the federal reserve?

A

a board of 7 governors appointed by the president and confirmed by the senate the governors have 14 year terms

109
Q

who is the most important member of the board of governors? why?

A

the chair they direct the Fed staff, preside over board meetings, and testify regularly about federal policy in front of congressional committees

110
Q

how many federal reserve banks are there?

A

12

111
Q

monetary policy

A

the setting of the money supply by policy makers in the central bank

112
Q

what is the federal open market committee made up of?

A

seven members of the board of governors five of the twelve regional bank presidents

113
Q

why is NY permanent?

A

NY is the traditional financial center of the US economy and because all Fed purchases and sales of government bonds are conducted at the New York Fed’s trading desk the president of the NY fed always gets a vote

114
Q

reserves

A

deposits that banks have received but not loaned out

115
Q

money multiplier definition

A

the amount of money the banking system generates with each dollars of reserves

116
Q

leverage

A

the use of borrowed money to supplement existing funds for purposes of investment

117
Q

open-market operations

A

the purchase and sale of US government bonds by the Feds

118
Q

quantity theory of money

A

explanation of how the price level is determined and why it might change over time

119
Q

fisher effect

A

the one-for-one adjustment of the nominal interest rate to the inflation rate crucial for understanding this change

120
Q

shoeleather costs

A

the resources wasted when inflation encourages people to reduce their money holdings

121
Q

which graph is this?

A

loanable funds market graph

122
Q

what are A and B?

A

wage and labor

123
Q
A
124
Q

what are C and D?

A

supply and minimum wage (floor)

125
Q

what are E and F?

A

demand and efficient wage

126
Q

what are G and H?

A

W* and L*

127
Q

what are I, J, and L?

A

LD, LS, and unemployment

128
Q

what graph is this?

A

minimum wage graph

129
Q

what are A and B?

A

interest rate & amount loanable funds

130
Q

what are C and D?

A

demand and supply

131
Q

what are E and F?

A

E nothing, F=$

132
Q

what are G and H?

A

D3 and S2

133
Q

what are I, J, and K?

A

$2 and i2 and i3

134
Q

what graph is this?

A

money supply

135
Q

what are A and B?

A

v=1/p and MD

136
Q

what are C and D?

A

MS and MD2

137
Q

what are E and F?

A

SL and 4

138
Q

what are G and H?

A

3 and 2

139
Q

what are I and J?

A

1 and 1

140
Q

what are K, L, and M?

A

3, 2, and 1

dont forget the i1, i2, and i3

141
Q
A

Economics (4 decks)

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