Macro 2

Question 0

The fraction of change in an income that is spent on consumption divided by the change in income that caused it

Answer 0

Marginal propensity to consume

Question 1

The relationship between consumption and income

Answer 1

Consumption function

Question 2

The fraction of a change in income that is saved, the change in income that caused it

Answer 2

Marginal propensity to save

Question 3

The relationship between saving and income

Answer 3

Saving function

Question 4

The value of assets minus liabilities

Answer 4

Net wealth

Question 5

Young people borrow, middle ages pay off debt, in order people draw from their savings: on average net savings over a lifetime or small

Answer 5

Lifecycle model of consumption and saving

Question 6

The relationship between the price level and out put the firms are willing to supply

Answer 6

Aggregate supply

Question 7

Dollars of the current year

Answer 7

Nominal wage

Question 8

Dollars of the constant purchasing power

Answer 8

Real wage

Question 9

The output produced when there are no surprises about the price level

Answer 9

Potential output

Question 10

The unemployment rate when the economy produces its potential output

Answer 10

Natural rate of unemployment

Question 11

And macro economics, a period during which the resource prices, especially those of the labor, Are fixed by explicit or implicit agreements

Answer 11

Short run

Question 12

A curve that shows a direct relationship between the price level in the real GDP supplied in the short run

Answer 12

Short run aggregate supply curve

Question 13

The price level and real GDP that occur when aggregate demand curve intersects the short run aggregate supply curve

Answer 13

Short run equilibrium

Question 14

The amount by which output in the short run exceeds the economies potential output

Answer 14

Expansionary GDP

Question 15

And macro economics, A period. During which wage contracts and resource price agreement can be renegotiated: there are no surprises about the economies actual price level

Answer 15

Long run

Question 16

The price level in real GDP that occurs when the actual price level equals the expected price level, the real GDP supplied equals potential output, and the real GDP supplied equals the real GDP

Answer 16

Long run equilibrium

Question 17

The amount by which the actual output in the short run fall short of the economies potential output

Answer 17

Contractionary GDP

Question 18

A vertical line at the economies potential output: aggregate supply when there are no surprises about the price level and all resource contracts can be re-negotiated

Answer 18

Long run aggregate supply curve

Question 19

A situation in which workers and employers failed to achieve an outcome they would all prefer

Answer 19

Coordination failure

Question 20

Unexpected events that affect aggregate supply, sometimes only temporarily

Answer 20

Supply shocks

Question 21

Unexpected events that increase aggregate supply, sometimes only temporarily

Answer 21

Beneficial supply shocks

Question 22

Unexpected events that reduce aggregate supply sometimes only temporarily

Answer 22

Adverse supply shocks

Question 23

The theory that the natural rate of unemployment depends and a part of the recent history of unemployment, high unemployment rates increase the natural rate of employment

Answer 23

Hysteresis

Question 24

During economic expansion and recession

Answer 24

Progressive income tax

Question 25

During economic expansion, the system automatically increases the flow of unemployment insurance taxes from income stream to the unemployment insurance fund moderating aggregate demand

Answer 25

Unemployment insurance

Question 26

The 1960s, golden age of Keynesian and economics Pres. Kennedy proposed a federal budget deficit Pres. Johnson: cut taxes

Answer 26

Golden age to stagflation

Question 27

Hi unemployment high inflation resulting from a decrease in aggregate supply and demand management policies weren't working

Answer 27

1970s stagflation

Question 28

To traders are willing to exchange their products directly

Answer 28

Double the coincidence of wants

Question 29

Anything that is generally excepted in exchange for goods and services

Answer 29

Money

Question 30

Anything that facilitates traded by being generally excepted by all parties

Answer 30

Medium of exchange

Question 31

Anything that serves both as money and as a commodity

Answer 31

Commodity money

Question 32

A common unit for measuring the value of each good and service

Answer 32

Unit of account

Question 33

Anything that remains it's purchasing power over time

Answer 33

Store of value

Question 34

People tend to trade away inferior money and hoard the best

Answer 34

Greshams law

Question 35

The difference between the face value of money and the cost of supplying it: the profit from issuing money

Answer 35

Seigniorage

Question 36

Money who's face value exceeds the cost of production

Answer 36

Token money

Question 37

A written order interaction the bank to pay

Answer 37

Check

Question 38

A bank account the permits direct payment to a third-party: for example to check or debit card

Answer 38

Transaction account

Question 39

Only a portion of the bank deposits it's bank by reserves

Answer 39

Fractional reserve banking system

Question 40

Originally, papers promising a specific amount of gold and silver to anyone who presented them issuing banks for redemption: today Federal Reserve notes are paper money

Answer 40

Banknotes

Question 41

Banknotes that exchange for a specific commodity such as gold

Answer 41

Representative money

Question 42

Money not redeemable for any commodity: its status as money is conferred initially by government but eventually by common experience

Answer 42

Fiat money

Question 43

United States currency that constitutes a valid in legal offer of payment of debt

Answer 43

Legal tender

Question 44

Institutions that serve as go-betweens, excepting funds from savers and lending them to borrowers

Answer 44

Financial intermediaries

Question 45

Commercial banks and thrift institutions: financial institutions that except deposits from the public bank

Answer 45

Depository institutions

Question 46

Depository institutions that historically make short term loans primarily to businesses

Answer 46

Commercial bank

Question 47

Savings banks and credit unions depository institutions that historically lent money to households

Answer 47

Thrift institutions

Question 48

A collection of short-term interest earning assets purchased with funds cooled from many shareholders

Answer 48

1972 Merrill Lynch

Question 49

Purchases of sales of government securities by federal reserve an effort to influence the money supply

Answer 49

Open market operations

Question 50

12 member group that makes decisions about open market operations

Answer 50

Federal open market committee

Question 51

Deposits and financial institutions against which checks can be written in ATM or debit cards can be applied

Answer 51

Checkable deposits

Question 52

Measures the economy's money supply

Answer 52

Money aggregates

Question 53

The narrowest measure of money supply, consisting of currency, and coins held by the nonbanking public, checkable deposits, and travelers checks

Answer 53

M1

Question 54

Deposits that earn interest but have no specific maturity date

Answer 54

Savings deposits

Question 55

The money aggregate consisting of animal one plus savings deposits and money market deposit accounts: a small denomination time deposits

Answer 55

M2

Question 56

Cards that talk directly to the bank account to fund purchases

Answer 56

Debit card

Question 57

A situation in which one side of the market has more reliable information then the other side

Answer 57

Asymmetric information

Question 58

Assets minus liabilities

Answer 58

Net worth

Question 59

A financial statement that shows assists, liability, and net worth at a given point in time

Answer 59

Balance sheets

Question 60

Anything of value that is owned

Answer 60

Assets

Question 61

Anything that is owed to another individual or institution

Answer 61

Liability

Question 62

The dollar amount of reserves the bank is obligated by regulation to hold

Answer 62

Required reserves

Question 63

Obligation by regulation to hold

Answer 63

Required reserve ratio

Question 64

Bank reserves exceeding required reserves

Answer 64

Excess reserves

Question 65

A measure of the ease which an asset can be converted into money without significant loss of value

Answer 65

Liquidity

Question 66

A market for overnight lending and borrowing of reserves among banks, the market for reserves on account at the Fed

Answer 66

Federal market funds

Question 67

The interest rate charged and the federal market, the interest rate banks charge for one another for overnight borrowing: the feds target interest rate

Answer 67

Federal funds rate

Question 68

The multiple by which the money supply increases as a result of an increase in the fresh reserves in the banking system

Answer 68

Money multiplier

Question 69

Conducting banking transactions over the Internet

Answer 69

Electronic banking or E banking

Question 70

Purchases and sales of government bonds for the purpose of altering bank reserves

Answer 70

Open market operations

Question 71

A certificate of knowledge Ing a debt and the amount of interest to be paid each year until repayment: an IOU

Answer 71

Bond

Question 72

The rate of return on a bond: the annual interest rate payment divided by the bonds price

Answer 72

Yield

Question 73

Purchasing of US government bonds by the Fed to increase the money supply

Answer 73

Open market purchases

Question 74

Federal Reserve lending of reserved to profit banks

Answer 74

Discounting

Question 75

The interest rate of the Fed charges that borrow reserves

Answer 75

Discount rate

Question 76

The relationship between the mound business is plan to invest and the economy's income

Answer 76

Investment function

Question 77

A term that means independent

Answer 77

Autonomous

Question 78

The amount of investments that firms plan to undertake during a year

Answer 78

Planned investment

Question 79

Amount of investment actually undertaken

Answer 79

Actual investment

Question 80

A relationship showing a given price level planned spending each income or real GDP

Answer 80

Aggregate expenditure line

Question 81

A relationship between aggregate income in aggregate spending that determines or a given price level where that amount of people plan to spend equals the amount produced

Answer 81

Income expenditure model

Question 82

Structural features of government spending and taxation that reduced fluctuation and disposable income and us consumption over the business cycle

Answer 82

Automatic stabilizer

Question 83

deliberate manipulation of government purchases taxation and transfer payments to promote macro economic goals such as full employment priced ability and economic growth

Answer 83

Discretionary fiscal policy

Question 84

The ratio of it change in the GDP demanded to the initial change in the Automous net taxes that brought it about

Answer 84

Simple tax multiplier

Question 85

An increase in government purchases decrease in taxes or some combination of the two aimed at increasing aggregate demand enough to return the colony to his potential output

Answer 85

Expansionary fiscal policy