final exam Flashcards
t/f: It’s better to have a 5% increase in output and no inflation instead of the opposite.
TRUE
Which of the following is considered a open market activity?
Selling government bonds
Inflation is measured by…
Consumer Price Index (CPI)
You probably wouldn’t be bothered by inflation if (3)
- you owned a house.
- you owed lots of money.
- your paycheck was linked to the CPI.
A period of temporary economic decline during which trade and industrial activity are reduced.
RECESSION
Which of these are considered part of M1? 3)
- Federal Reserve Notes
- coins
checkable deposits
*anything BANK
Which of these is a substitute good?
tuna and salmon
T/F: Fiscal policy can be either expansionary or contractionary.
TRUE
If we need a shift right in the aggregate demand model, what point are we in the Business Cycle?
Trough Point
T/F: Price floors are set below the market price..
false
The Laffer curve illustrates that
A decrease in tax rates can cause an increase in tax revenues
WHAT IS A decrease in tax rates can cause an increase in tax revenues
the LADDER CURVE
Which of these is not included as a determinant of supply?
allocation of tax revenues
WHAT IS ..
1. A change in producer expectations
2. Change in technology
- A change in taxes and subsidies
determinant of supply
T/F: To an economist, an increase in quantity demanded is the same thing as an increase in demand…
FALSE
Which of these is not included in the labor force?
discouraged workers
The unemployment rate is the…
Percentage of the Labor force unemployed
The smallest expenditure component of GDP is
Net Exports
The three functions of money are
Medium of exchange, unit of account, and store of value
Medium of exchange, unit of account, and store of value
ARE WHAT????
FUNCTIONS OF MONEY
The US banking sector uses a ___ banking system, allowing banks to expand the money supply by creating loans.
Fractional Reserve
T/F: More than anything else, a nation’s wealth depends upon its natural resources.
False
