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Macroeconomics Flashcards

1
Q

What is macroeconomics?

A

study of economics from the perspective of the country

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2
Q

What does a circular flow model show?

A

Shows the inter-relationship of a large variety of factors in a national economy; a way to visualize the economic activity of a country.

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3
Q

GDP formula

A

C + I + G + (Ex - Im)

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4
Q

C

A

Private consumption

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5
Q

I

A

Investment

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6
Q

G

A

government spending

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7
Q

Ex

A

exports sold

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8
Q

Im

A

imports bought

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9
Q

Prosperity = ?

A

Low Unemployment

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10
Q

Inflation reduces/increases purchasing power

A

reduces

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11
Q

Fiscal Policy

A

government spending and taxing decisions

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12
Q

Monetary Policy

A

Control of money supply

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13
Q

Regulatory Policy

A

Impact of regulations

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14
Q

Foreign Trade Policy

A

Laws and Rules and Attitude

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15
Q

Which letter in the GDP formula represents Fiscal Policy?

A

G

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16
Q

Choices about spendings influences prosperity in which way?

A

industry will divert resources to meet govt. choices

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17
Q

Choices about taxing will influence prosperity?

A

People seek to avoid taxes; taxes will diminish C

18
Q

How do choices about balancing the budget influence prosperity?

A

borrowing diverts investment
printing fuels inflation

19
Q

M0 –> M4 (liquid rate of change?)

A

high to low

20
Q

Two ways to create money

A

Mint printing
Bank loans

21
Q

Maximum Money formula (bank loan)

A

Bank Deposits/Reserve Requirement (%–>decimal)

22
Q

Monetary Policy in the US is controlled by?

A

FED (Federal Reserve Board)

23
Q

Dual Mandate?

A

Fight Inflation & Fight Unemployment

24
Q

Tools to Control Money Supply

A

Open Market Operations
Reserve Requirement Ratio
Discount Rate
Term Auction Facility
Interest on Bank Reserve Balances

25
Q

Nerfed Monetary Policy Tools

A

Reserve Requirement Ratio
Discount Rate
Term Auction Facility

26
Q

Cost Benefit Analysis?

A

Evaluating the costs and benefits of a regulation

27
Q

Tarrifs

A

a tax on goods and services imported into the country

28
Q

Taxes

A

mandatory payment

29
Q

Treaties

A

made between two foreign governments

30
Q

Indicators of Country’s Economic Prosperity?

A

GDP + Employment Rates

31
Q

What is Money?

A

Store of Value
Medium of Exchange
Accounting Element

32
Q

Reasons for Macroeconomics

A

Promote Prosperity
Avoid Decline

33
Q

Dominant policies in improving country’s economics?

A

Fiscal and Monetary Policy

34
Q

M0

A

Currency Notes + Coins + Bank Reserves

35
Q

M1

A

M0 + demand deposits (money in bank)

36
Q

M2

A

M1 + marketable services + other less liquid bank deposits

37
Q

M3

A

M2 + money market funds

38
Q

M4

A

M3 + least liquid assets

39
Q

Marketable Services

A

stocks (not very liquid)

40
Q

Revenue Bills and Budget Bills start where

A

House of Representatives

Economics (5 decks)

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