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ECON 203 > Final Exam > Flashcards

Final Exam Flashcards

1
Q

On Canada’s balance of payments, a German buying. Canadian bond creates a

A
  • credit on the capital account
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2
Q

On Canada’s balance of payments, a Canadian buying an American avocado creates a

A
  • debit on the current account
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3
Q

A Canadian buy-in gan avocado from the U.S. creates additional

A

-demand for U.S. dollars

supply of Canadian dollars

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4
Q

Additional shipments of Canadian lumber to the U.S. will cause

A
  • appreciation of the Canadian dollar
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5
Q

Falling interest rates in Canada with steady interest rates in the U.S. will cause

A
  • a decrease in the demand for Canadian dollars
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6
Q

aggregate behaviour

A
  • the behaviour of all households and firms, taken together. (e.x. studying unemployment)
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7
Q

aggregate output

A
  • the total quantity of goods produced by the entire economy in a given period
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8
Q

Name the three major concerns of macreconomics

A

1) output growth
2) unemployment
3) price level stability (inflation and deflation)

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9
Q

sticky prices

A
  • are prices that don’t always adjust rapidly between quantity supplied and quantity demanded
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10
Q

unemployment rate

A
  • the percentage of the labour force that is unemployed
  • key indicator of the economy’s health
  • measures the percentage of people who are ready and able to work but don’t have a job
  • if there is an unemployment rate - then that means the aggregate labour market is NOT in equilibrium
  • near impossible to not have an unemployment rate in a dynamic economy
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11
Q

inflation

A
  • is an increase int eh overall price level
  • governments want to keep inflation low
  • encourages borrowing, consumption, but can also discourage investment
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12
Q

hyperinflations

A
  • a period of very rapid increase in the overall price

- ver rare –> could destabilize an economy or government

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13
Q

deflation

A
  • a decrease in the overall price

- discourages borrowing and consumpiton

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14
Q

stagflation

A
  • high inflation consistent with high unemployment
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15
Q

Name the 4 components of the macroeconomy

A
  • households –> private sector
  • firms –> private sector
  • the government –> public sector
  • rest of the world –> foreign sector
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16
Q

Name the 3 market arenas

A

1) goods and services market
2) labour market
3) money market

17
Q

labour market

A
  • input market
  • households = SUPPLY labour
  • firms and governments = DEMAND labour
  • rest of the world = SUPPLY and DEMAND labour
18
Q

labour productivity

A
  • aggregate output/ # of hours worked
19
Q

money market (capital/financial)

A
  • made up of the borrowers and savers
  • firms and government = demand funds
  • consumers = supply funds
  • firms - borrow (demand) to build new buildings to earn more in the future
  • they consider the cost and availability of borrowing vs raising equity
20
Q

the great gatsby

A
  • set in the 1920s
  • boom cycle
  • very wealthy and gridy
21
Q

the grapes of wrath

A
  • set in the early 1930s
  • bust cycle
  • bad for the economy, very depressing time
22
Q

great depression

A
  • a period of severe economic contraction and high unemployment in 1930s
  • said that a lot of monetary and fiscal policy errors prolonged the depression
  • didn’t end until the war started
23
Q

John Maynard Keynes

A
  • father of macroeconomics
  • influenced byt hed depth of the great depression
  • ground-breaking book - general theory of employment
  • says that government should step in when aggregate demand is low
24
Q

All other things being equal, an increase in the domestic price level will

A
  • decrease the value of real wealth and cause the consumption and aggregate expenditure functions to shift dowward
25
Q

All other things being equal, a decrease in the domestic price level will shift the next export function

A
  • upward, thus causing the aggregate expenditure function to shift upward
26
Q

The aggregate demand (AD) curve relates

A
  • equilibrium real national incomes to the price level
27
Q

All other things equal, a fall int eh domestic price level causes

A
  • the aggregate expenditure curve to shift upward and hence leads to a movement downward and to the right along the AD curve
28
Q

All other things being equal, the AD curve shifts to there ight was a result of

A
  • increased government expenditure
  • increased autonomous exports
  • increased investment expenditure
  • decreased tax rates
29
Q

All other things being equal, an increase in desired investment expenditures will

A
  • shift the AE curve upward
  • shift the AD curve to the right
  • cause the equilibrium levels of real national income and price to increase if the economy operates with a positively sloped SRAS curve
30
Q

fine-tuning

A
  • refers to the governments role in seeking goldilocks solutions (just right solutions) to inflation and unemployment
31
Q

treasury bonds, notes, or bills

A
  • promissory notes issued by the federal government when they borrow money
  • promise to pay
32
Q

corporate bonds

A
  • promissory notes issued y tech corporations when they borrow money
33
Q

stock

A
  • a quantity of something at a given time
34
Q

flow

A
  • a quantity measured per unit of time that shows how fast something is changing
35
Q

GDP (gross domestic product)

A
  • the value of all goods and services produced in a. country in a year
36
Q

frictional unemployment

A
  • arises from the flow of individuals form job to job and in and out of employment. (unemployed for short period of time because of constant movement between jobs).
37
Q

structural unemployment

A

-mismatch of available jobs and available skills. (don’t have right qualifications for jobs that are available). Also includes seasonal unemployment

ECON 203 (18 decks)

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