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AP Econ Unit 2 Review Flashcards | StudBud
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AP Econ Unit 2 Review
AP Econ Unit 2 Review
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Flashcards
30 cards
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Practice quiz
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Questions
30
Answers
1
Unexpected increase in inventories usually precede
Production rises
Increases in production
Production stays the same
Decreases in production
2
GDP is equal to the sum of income paid to all factors of production
True
False
3
A set of consumer purchases of goods and services used to measure changes in overall price is?
GDP
OMO
Market Basket
Real GDP
4
What does the CPI measure?
Changes In prices of all consumer goods
One of several price indices that measure prices overtime
Consumer spending and savings rate
Changes in the prices of all products
5
In 2016 the nominal GDP for Country X was $330B and the GDP deflator was 110. The real GDP for 2016 was?
$300B
$320B
$325B
$315B
6
What is the inflation rate formula
(1+nominal rate)/(1+rate if Inflation )-1
GDP on Nominal terms/ Deflator of GDP
(Changes in CPI levels/levels of CPI last year) x100
1/Reserve Ratio
7
If the nominal GDP in a given year is $300B and the GDP deflator for that year is 120, how much is the real GDP?
240B
200B
250B
225B
8
What is a component to aggregate demand
Capitol Stock
Quantity and Quality of natural resources
Velocity
Interest rates
9
What GDP can’t tell you?
Composition
Wages and profit
Monetary value of goods
Monetary value of services
10
What is frictional unemployment?
Share of unemployment that arises from the business cycle
Workers lack skills for available jobs
Due to time workers spend in the job search
More people seeking jobs than there are jobs available
11
The circular-flow model indicates that final goods are produced by?
Markets
Banks
Business
Firms
12
Increase/Decrease in Government Spending and Increase/Decrease in taxes is a ?
___
Fiscal Policy
____
Monetary Policy
13
What generates an inflow of funds into the country?
Exports
Inputs
Outputs
Imports
14
What is a firm’s goal in a market economy?
To maximize profit
To keep profit the same
To minimize profit
To grow business
15
In 2007, the nominal GDP was $50B the GDP deflator was 200. What was the real GDP?
$25B
$15B
$30B
$20B
16
A short com increase in national income could be caused by a decrease In imports
False
True
17
To buy/sell government bonds
Reserve Requirment
Open Market Operations
___
Discount rate
18
What generates an outflow of funds to the rest of the world?
Inputs
Exports
Outputs
Imputs
19
Frictional unemployment occurs when what happens?
Worker is replaced by technology
A worker quits to find a better job
A worker is fired
A collage student graduates
20
Increasing/decreasing minimum requirements reserves
OMO
___
___
Required Reserves
21
What’s the formula for Nominal GDP(income)
GDP=C+G+I+NX
GDP=W+I+R+P
GDP on Nominal Terms/Deflator of GFP
MV=PT
22
What are 3 Components of Aggregate Supply
Supply Shock, Quantity and Quality of natural resources, R & D
Productive Labor Cost, Bus.Taxes, Net Exports
Health and Education, Bus.Costs, Taxes
Productive Labor Force, Technology, Government Spending
23
Who demands goods and services in the product market?
Businesses
Banks
Households
Firms
24
What is the Money Multiplayer Metric formula?
MV=PT
(1+nominal rate)/(1+rate of inflation)-1
1/Reserve Ratio
GDP on nominal terms/ deflator of GDP
25
Which of the following is true regarding quantity theory of money?
Increase in price levels will lead to an increase in interest rates
Decrease in money supply will decrease the velocity of money
Increase in money supply or the velocity of money will increase nominal GDP
When velocity of money doubles, the unemployment rate doubles
26
The income approach to calculating GDP mostly involves adding what?
Money generated through household production
Spending by consumers, business, government
Rent, wages, Income, profit
Changes in income after government redistribution
27
Deflation is a slowdown in the rate of increase in price level
False
True
28
If inflation is higher than expected who benefits, borrowers or lenders?
Lenders
No one
Savers
Borrowers
29
What occurs during a recession?
Real GDP decrease
GDP Increases
Real GDP increases
GDP decreases
30
Another name for GDP is Aggregate Output
True
False
