Intro to Macroeconomics

Question 1

Hysteresis

Answer 1

State of the system when effects of an economic event persist even after the initial cause has been removed.

Question 2

Circular and cumulative causation

Answer 2

Theory that economic changes in one area can cause a self reinforcing cycle causing a widening gap between developed and underdeveloped regions

Question 3

Polya Process

Question 4

Herding Affect

Answer 4

Following the wisdom of the crowds

Question 5

Irrational Exuberance

Question 6

Rocky Scholls

Answer 6

Involuntary unemployment

Question 7

Fiscal Policy

Answer 7

Taxes and government spending

Question 8

Monetary Policy

Answer 8

Set Interest Rates (U.S Federal Funds Rate)

Question 9

Yield Curve

Answer 9

Length of the loan increases → Interests increase

Question 10

Prime Rate

Answer 10

For outstanding customers

Question 11

Contractor Impossible Trilemma

Answer 11

High Quality → Low Cost→ Done Quickly

Question 12

Central Bank Impossible Trilemma

Answer 12

Fixed exchange rate → free flow of financial capital→ sovereign monetary policy

Question 13

Real economies grow how?

Answer 13

Exponentially, not linearly

Question 14

Stocks and Flows

Question 15

Inverted Yield Curve suggest what?

Answer 15

Recession

Question 16

Social Security

Question 17

Bonds

Question 18

Michaillat and Saez measure

Question 19

Long run trends

Question 20

Cyclical considerations