The circular flow diagram shows the flow of money and goods between:

Households, firms, governments, and foreign countries

How the equil level of Agg Exp. changes as the PL changes

Which of the following would result from a tariff?

An increase in domestic production

Personal income is equal to:

National income plus welfare benefits minus corp. income

Nations trade what they produce in excess of their own consumption to:

acquire other things they want to consume

A country has a comparative advantage when the opportunity cost of producing a good is:

lower than that of other nations

Who benefits in the restrictions put on international trade?

The domestic producers, The government

What is the equation for the official unemployment rate?

# of unemployed divided by total size of labor force

The velocity of money is:

the ave. number of times each dollar is spent

What is the "crowding out" effect?

right shift in AD which = a increase in real interest rates

The money-creating ability of the banking system may be lowered by:

an increase in the reserve requirement

What is an advantage of a floating exchange-rate system?

The countries are free to control it

studbud

AP Macro Final Review

26 termsStudBud Administration273 plays

#ap #apmacro #economics

Flashcards26 cardsFPractice quizPHost liveL

Questions 26

Answers

1
The theory of absolute advantage is based on:
gross domestic product
relative cost of production
total cost including transportations
relative opportunity cost
2
What is the equation for GDP?
GDP = C- I- G- NX
GDP = everything
GDP = C+ I +G+ NX
GDP = C- Y-G- NX
3
What is a tariff?
A tax on imported goods
A particular amount that can be imported
A particular song that has to be sung during the holidays
A tax on all exported goods
4
The circular flow diagram shows the flow of money and goods between:
Households, consumers, governments, and foreign countries
Households, firms, governments, and only friendly countries
Households, firms, schools, and foreign countries
Households, firms, governments, and foreign countries
5
What is the equation for personal income?
PI = I + S
PI = C + G
PI = C + S
PI = I + G
6
Macroeconomics focuses on:
The small picture
The big picture
7
The AD curve shows?
The positive relationship between the PL and GDP
The amount people spend at different GDP levels
The negative relationship between Agg. Expenditures and GDP
How the equil level of Agg Exp. changes as the PL changes
8
Which of the following would result from a tariff?
Decrease in prices of the imported goods
A greater volume of international trade
An increase in government budget deficit
An increase in domestic production
9
Personal income is equal to:
Disposable personal income minus personal taxes
National income plus welfare benefits minus corp. income
Disposable income plus transfer payments
National income plus business profits
10
What is the argument against foreign goods being imported to the US?
The American economy is better off
jobs are created
jobs are lost
foreign producers do better
11
Nations trade what they produce in excess of their own consumption to:
reduce the size of their foreign trade deficit
earn "good will" from the World Bank
generate jobs for the domestic economy
acquire other things they want to consume
12
Opportunity cost is best defined as:
What makes me happy
What makes me sad
What is chosen instead of
What is given up
13
A country has a comparative advantage when the opportunity cost of producing a good is:
lower than that of other nations
equal to that of other nations
higher than that of other nations
14
Is trading beneficial?
Yes
No
15
Which would decrease household expenditures?
higher domestic price level
increased consumer confidence
lower income taxes
population growth
16
Who benefits in the restrictions put on international trade?
The foreign producers
The foreign government
The domestic producers
The government
17
Under a fixed exchange-rate system, how must it be maintained?
Imports of 1 country must = the exports of the other
The government must intervene
Trading partners must intervene
The Fed must intervene
18
What is the bottom of the business cycle called?
Trough
Peak
Expansion
Contraction
19
What is the equation for the official unemployment rate?
# of unemployed divided by # of employed
# of unemployed divided by size of non-industrial population
# of unemployed divided by total size of labor force
# of unemployed divided by total population
20
The velocity of money is:
the ave. length of time it takes a dollar to be spent
The value of the dollar in relation to foreign countries
The purchasing power of money
the ave. number of times each dollar is spent
21
Countries import goods in which they have the:
comparative disadvantage
comparative advantage
reputation for good product quality
absolute advantage
22
What is the "crowding out" effect?
the effect of the president increasing the money supply
Left shift in AD which = a decrease in real interest rates
the lower exports due to an appreciating dollar
right shift in AD which = a increase in real interest rates
23
The money-creating ability of the banking system may be lowered by:
a fall in the overall rate of inflation
an increase in the excess reserves
decrease in the cash balance that people wish to hold
an increase in the reserve requirement
24
What is an advantage of a floating exchange-rate system?
The Government controls it
The countries are free to control it
The Fed controls it
The countries always know how must imported goods cost
25
A TV sells for $200 in the US & exchange rate is $1=1.3 euro with ppp how much is the tv in Ger
260 Euros
200 Euros
350 Euros
300 Euros
26
If the world price of a good is lower than its domestic price, the country will:
Have to import
Have to export

AP Macro Final Review Flashcards | StudBud