Homework Flashcards

1
Q

A decision made on the margin is primarily a question of ____________________

A

how much?

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2
Q

The goals of equity and efficiency

A

tend to be in conflict with one another

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3
Q

Market failure

A

When economic interactions lead to inefficient outcomes

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4
Q

Marginal decisions are choices about __________________

A

Making incremental changes

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5
Q

The paradox of thrift suggests

A

When people save in anticipation of an economic downturn, they can worsen the downturn

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6
Q

Inflation may cause people

A

to stop using money and rely on bartering

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7
Q

According to Keynsian Economics, a depressed economy is caused by

A

inadequate spending

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8
Q

Movements in inflation are closely related to

A

Business cycle

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9
Q

Most widely used indicator of conditions in the labor market

A

unemployment rate

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10
Q

During recessions

A

unemployment increases

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11
Q

Trade deficit

A

value of imorts > value of exports

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12
Q

The idea that fiscal and monetary policies could be used to fight recessions was proposed by ________________________

A

John Maynard Keynes

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13
Q

In long run, overall level of prices is determined by:

A

Changes in money supply

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14
Q

Long run economic growth

A

Has important implications for policy concerns

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15
Q

Fiscal policy involves

A

Changes intaxation and government spending

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16
Q

Concept of business cycle

A

crucial role in developing macroeconomics

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17
Q

Government agency that calculates CPI

A

Bureau of Labor and Statistics

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18
Q

Overall level of well being

A

Tends to rise with GDP per capita

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19
Q

National income and product accounts keep track of

A

Consumer spending, business investment, government purchases

20
Q

U.S GDP in 2010

A

14.5 Billion

21
Q

If inflation rate has been constant, what is happening to overall price level

A

increasing at a constant rate

22
Q

Consumer spending is _____ percent of GDP

23
Q

Price index

A

Normalized measure of the overall price level

24
Q

Falling GDP associated with ______________

A

rising unemployment

25
Natural rate of unemployment rises when
new entrants to labor force
26
Unexpected deflation
Makes it harder for borrowers to repay their loans
27
Actual unemployment =
cyclical + natural
28
When unemployment rate is low
most is frictional
29
real wage =
wage/price level
30
efficiency wage
wage set above equilibrium level to motivate workers
31
In 2010, ___ percent of unemployment people were considered long term unemployed
43
32
Costs with changing a listing price
menu costs
33
Unemployment rate based on a survey of \_\_\_\_\_\_\_\_\_\_\_\_\_\_
60,000 families
34
Research and development is paid for by
a combination of private and government funds
35
Paul Romer described resarch and development as \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
the creation of improved instructions
36
1948 - 2007, labor productivity rose by
2.3 percent per year
37
Productivity depends on:
technology human capital Physical capital
38
Natural resources are
less important in determing productivity than human and physical capital
39
Real GDP per capita in 2010 was
7 times as it was in 1990
40
Countries in which investment counts for large part of GDP
have a high domestic savings rate
41
key statistic to track economic growth
real GDP per capita
42
New growth theory suggests that technological change\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
responds to economic incentives
43
growth accounting allows us to calculate
the effects of greater physical and human capital on economic growth
44
Annual growth rate of per capita GDP
1.8 percent
45
primary ingredient for long run economic growth
rising labor productivity