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Econ Comp quizin
Unsold Inventory
What is a commercial bank
Econ Comp quizin
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Answers
1
What is a commercial bank
A bank that offers financial services to the government organisations
A bank that offers financial services to other banks
A bank that offers financial services to the public and to businesses
A bank that creates commercials
2
Unsold Inventory
Owners Equity
Asset
Expense
Liability
3
What is real income?
When a salary figure is converted to an hourly wage
The amount employees earn after tax
Income of individuals after considering inflation
The amount an employee earns after a bonus
4
What is a budget deficit?
the budget increase
the budget drops
income exceeds expenses
expenses exceed income
5
What is the
product
market?
market in which firms purchase the resources households
the market in which income is received for selling resources
households purchase goods and services from firms
6
Inventories are Unsold Goods
False
True
7
What is the base year
Arbitrary year whose value as an index number is defined as 100
Has to be 10 years ago
Can be any year every 5 years
2010 for everything
8
Common access resources
Can be overused or over-consumed.
Are nonexcludable.
Are likely to depletion.
All of them are correct.
9
What is a medium of exchange
An item used to measure value
An item that buyers give to sellers when they purchase goods and services
An item used for investment purposes
An item that holds value over time
10
A government subsidy per unit of output increases supply.
True
False
11
What is the GDP deflator?
[Nominal GDP / Real GDP] X 100
[Market Basket / Base Market Basket] X 100
IDK
[Year 2-Year 1 / Year 1] X 100
12
Evidence of economic inequity in the U.S. could be.
Terrain map differences based on race location
Household wealth differences based on race
Weather report differences based on racial population
13
What is a trough in economics?
Lowest point
Growth point
Stable point
Highest point
14
Marginal Private Cost is....
with positive externality paid by supplier cost borne by consumer
with negative externality paid by supplier cost borne by consumer
with negative externality paid by supplier cost borne by producer
paid by consumer
15
A trade deficit is
when a country only imports
when a country exports more than in imports
when a country only exports
when a country imports more than it exports
16
MSC = MPC + externality. True or false?
False
True
17
Gross Domestic Product formula =
C - I + G - (X + M)
C + I + G + (M - X)
C + I + G + (X - M)
C + I - G + (X - M)
18
what is structural unemployment?
the unemployment which exists in any economy due to people b
unemployment resulting from industrial reorganization, typic
there is not enough aggregate demand in the economy to provi
Unemployment occurs when people are without work and activel
19
What is the interest-rate effect?
Lower interest rates lower investment spending
Higher interest rates lower investment spending
Higher interest rates increase government spending
Lower interest rates increase aggregate supply
20
What is real interest rates?
Interest rate without adjustment for inflation
Inflation Rate
Interest rate including inflation
Interest rate adjusted for inflation
21
What is inflation?
Extreme and rapid price increase
Price of goods go up
Currency loses its value
22
What is fiscal policy?
designed to make markets work more efficiently
changes to interest rates and the supply of money
the policy of increasing productive output of a country
changes to government taxation, government spending and borrowing
23
What is the interest rate effect?
I'm really interested low in interest rates
Higher interest rates encourage spending and investment
Interest rates have no effect on aggregate demand
higher interest rates discourage spending and investment
24
Public goods are non-excludable and non-rivalrous, so everyone can use them without reducing the availability to others.
False
True
25
What is an Expansionary Policy?
Decreasing the money supply
Inrceasing the money supply
Letting the money supply fly out of control
Stopping the flow of money completely
26
private goods are
Non excludable and rivalrous
Excludable and non rivalrous
Excludable and rivalrous
Non rivalrous and non excludable
27
A Market Failure..
appears where demand does not equal supply
leads to either under- or over-allocation of resources
is a failure in the market
is a common tragedy
28
Define “economic specialization”
producing everything for a country with no trade
not investing in industry & technology because of expense
producing what a country can make best
directly swapping goods without money
29
Specialization in economics means....
to have a special set of workers
to concentrate on and become an expert in a particular skill
to focus all energy on being a special worker
being a very special contributor to economics
30
Who are borrowers
Mr Witanowski
individuals, businesses government
Individuals, businesses, countries
Individuals, banks, businesses
31
Government provision will:
Increase the combined private and public contributions of the public good
Result in no change to the overall level of public good
Decrease the combined private and public contributions of the public good
32
What is consumer confidence?
Decreases spending
No change in spending
Spending fluctuates
Increases spending
33
The Gini coefficient is used below. The Gini coefficient represents...
Income distribution, to demonstrate where rich people are
GDP/GII
Income distribution, to demonstrate economic inequality
The income of an city/the income its peripheral cities
34
Public goods generally have
A negative externality
Negative externality
A neutral externality
A positive externality
35
What is an expansionary policy?
Cost of debt for the borrower and rate of return for the lender
The action of giving work to someone
Increases interest rates and limits the outstanding money supply
Grows economic activity by lowering interest rates which increases spending
36
What is aggregate demand?
The total demand for goods and services in the economy
The supply of raw materials in a country.
The total supply of goods and services in the economy.
The demand for consumer services.
37
What is the nominal income?
population's income can be receive in the form of money in a certain period
The purchasing power of income at the disposal of a person
products are taken at the expense of labor and are produced in the house
The remaining part of nominal income after deduction of taxes
38
Ample Reserves
The federal reserve setting an explicit target for the inflation rate
A bank’s reserves over and above its required reserves
A situation where the short term interest rate has been lowered to zero
Banks hold high levels of excess reserves so supply doesn't impact interest
39
Marginal Social Benefit
MPB - MEB
MPB + MEB
MEB - MEC
MEB + MEC
40
What are exports?
Products used in a country
portable explosions
Products shipped outside of a country
cupcake
41
What is the M1 money supply?
Long term money deposits
Short term money deposits
Coins and notes that are in circulation and other money
Only paper money
42
What is “crowding out”?
A. Increased demand for housing
C. Overuse of public goods
B. A fall in private spending due to government borrowing
D. High unemployment in crowded cities
43
What is short-run aggregate supply?
D) The total production of goods and services at full employment
C) The total production of goods and services when wages are fixed
A) The total production of goods and services when prices are flexible
B) The total production of goods and services when prices are sticky
44
Commodity-Backed Money
paper money that can be exchanged for gold and silver
gold and silver that can be exchanged for paper money
45
What is supply-side economic theory?
The idea that decreasing tax rates will increase revenue thru more spending
An idea that only benefits the wealthy at the expense of the poor
The idea that increasing the tax rate on the wealthy increases revenue
The idea that if more demand is increased, so will supply
46
What is appreciation?
Increase in the dollar's value relative to another currency
increase in overall price of goods
decrease in the dollar's value relative to another currency
increase in foreign investment
47
What is the National Debt?
Money the US gov. has borrowed + interest
Total sum of all money US citizens' debt
48
Direct government provision
Production by public and more than one nonprofit/private agencies
Public goods and services delivered by government-employed workforce
Government assigns part of a function to private or nonprofit sector
Public partners with private sector to provide goods and services
49
What is the labor force?
Stay at Home Parents
Employed and Unemployed
Unemployed and Discouraged Workers
Employed and Discouraged Workers
50
Marginal Social Cost
A cost or benefit from production or consumption affecting others.
private cost plus external cost to society.
An externality from production or consumption that creates an external cost
51
What are net exports?
imports minus exports
exports minus imports
imports plus exports
exports plus imports
52
When there is a contractionary gap, effective fiscal policy might be to
Reduce interest rates
Reduce market prices
Increase money supply
Increase government purchases
53
Name that Econ System: Inequality of opportunity
Barter
Planned
Command
Free Market
54
What phase of the business cycle is point 3?
Contraction
Peak
Trough
Expansion
55
The official unemployment rate:
is the percentage of the total population that is not working
is the percentage of the labor force that is unemployed
is the ratio of unemployed to employed workers
involves people over 16 yrs old who are not currently seeking employement
56
Discouraged workers
Are counted as part of total unemployment.
Do not actively seek employment.
Are part of the labor force
Are workers who are unhappy in their jobs
57
What is the net export effect?
when exports go sideways and imports go upside down :)
When net expenditure on exports rises as price level falls.
When net expenditure on exports lowers as price level falls.
when exports go up so imports go up as well.
58
What phase of the business cycle is point 4?
Peak
Expansion
Contraction
Trough
59
What is Fiscal Policy?
How a country controls the supply of money
How a government adjusts its spending levels and tax rates
When a government regulates businesses
60
What is a recessionary gap?
Unemployment is low
Economy produces too much.
Prices increase
Economy produces too little.
61
What are free-trade agreements?
Contacts that make certain products free to trade
Contracts that exclude countries from trading with others
Contracts that allow you to sell whatever you like
Contracts that remove barriers to trade eg. taxes
62
What is consumer price index?
The measure of the overall cost of goods and services bought by a consumer.
Study of how people behave under certain economic situations
Increase in overall prices of the economy
Paper bills or coins that are used by the public
63
Positive externalities exist when...
MSC>MSB
MPC>MPB
MPB>MPC
MSC<MSB
64
Resource Market
The market were transfer payments are made.
Where final goods are sold.
None of the above
Where the resources needed to make a good or service are sold.
65
15. What is the current account in economics?
A measure of domestic savings and investment
A component of government spending
A method of calculating GDP
A record of a nation’s trade in goods, services, and cross-border payments
66
The government offers Flooper's a per-unit subsidy of 50 cents per floop. How do Flooper's P & Q produced change?
c. Price unchanged. Quantity increases.
a. Price unchanged. Quantity unchanged.
d. Price increases. Quantity increases.
b. Price increases. Quantity unchanged.
67
Private Goods
goods BROUGHT IN from other countries
goods and services provided by businesses
goods and services paid for by taxes that belong to the community
the value of what you give up when you make a choice
68
What is “crowding out”?
D. High unemployment in crowded cities
C. Overuse of public goods
A. Increased demand for housing
B. A fall in private spending due to government borrowing
69
What does the Lorenze Curve illustrate?
income distribution
interest rates
unemployment
inflation
70
Where marginal private benefit = marginal private cost
Social optimum consumption
Private optimum consumption
Marginal social cost
Marginal social benefit
71
What are injections in the circular flow of income?
Savings, taxation, imports
Investments, taxation, imports
Investments, government expenditure, exports
Getting a needle!
72
6. In balance of payments, when total credits (inflows) equal total debits (outflows) across all accounts, BOP is in?
Deficit
Flux
Equilibrium
Surplus
73
At full employment output,
UR>Natural rate of unemployment
There is no unemployment
UR<Natural rate of unemployment
UR=Natural rate of unemployment
74
What is a free rider?
Motorcycle riders on private roads
A person riding illegally
People who pay no taxes
People that benefit from public goods without contributing.
75
What is the labor force?
unemployed people
employed people
total people aged 15 and over
employed + unemployed people
76
What is frictional unemployment?
willing and able to work but cannot find a job
persistent long-term unemployment
short-term unemployment caused from not matching employee to employer.
unemployment correlated with the ups and downs of the business cycle
77
What is the GDP deflator?
Unemployment rate
Interest rate
Price level measure
Trade balance
78
Marginal Private Benefit
The maximum the producer is wiling to pay
The minimum the consumer is willing to pay
The maximum the cosumer is willing to pay
The minimum the producer is willing to pay
79
Federal funds rate
money rates
interest which a depositary institute lends available funds to a depository
cookadoodledo
George Washington
80
All of the following are negative externalities EXCEPT
police violence against citizens
traffic around a large mall
oil spill in Alaska
crime near a casino
81
What is consumer confidence?
An increase in the AD line
Consumer’s assessment of economic conditions
Machinery, inventory, or property for building new things
When people feel they have enough money to buy Gucci slides
82
What is absolute advantage
A person has higher opportunity cost to produce than another
A person is able to produce less of a good than another
A person is able to produce more of a good than another
A person has lower opportunity cost to produce than another
83
What are Intermediate goods?
goods of mediocre quality
sushi restaurants
goods on their way from one place to another
goods used in making other final goods
84
What is the Business Cycle?
The alternating periods of expansion
moving while going up
moving on to the next
more work of time
85
Who are lenders in the business environment?
Government regulators
Customers buying products
Banks providing loans
Employees working for donations and employment
86
The Gini Index (AKA: Gini Coefficient)
This measures income inequality across a given population
Total monetary or market value of all finished goods and services produced
A country's GDP, life expectancy, literacy, education, & standard of living
How far the same amount of money goes in different countries
87
The discount rate is the rate
mortgage brokers will pay to the secondary market
at which borrows will be charged one point
mortgage bankers will pay to the secondary market
charged to member banks borrowing from the Federal Reserve Bank
88
What is non-discretionary fiscal policy?
used to find spending multiplier
Government policies that are built to stabilize the economy
bank's use of changes on interest rate to stabilize the economy
used when there is inflationary gap
89
What is nominal interest rate?
The interest rate that is also nominal.
The interest rate decided by banks.
The interest without inflation.
The interest rate adjusted for inflation.
90
What is long run aggregate supply?
Levels of production
Levels that are possible
Total amount of production in the economy as a whole
None of the above
91
Deadweight losses
are a result of underproduction where MC exceeds MB.
occur as a result of either overproduction or underproduction.
are a result of overproduction where MB exceeds MC.
are a result in which maximum willingness to pay = minimum acceptable price
92
What is a peak (in economics)?
a rise in stock prices
the highest point at the end of an economic expansion
a low in stock prices
the lowest point at the end of an economic recession
93
What are injections in the circular flow model?
A Money flow that adds funds into the economy
A decrease in funds
A Money flow
A real flow
94
Economic inequity means
Anyone can become rich if they try hard enough
The unequal distribution of income and opportunities between groups
People get what they work for
The equal distribution of income and opportunities between groups
95
What is excluded from the labor force?
A retired grandma who works at target for some extra cash
A person who is not working but has looked for a job last week
A 17 year old working full time
A man who has been kidnapped and locked in a basement for a year
96
What does a Lorenze Curve illustrate?
Price of goods
Production possiblities
Distribution of wealth and income
97
What is Nominal GDP?
GDP measured at current market prices
GDP measured at current market prices
GDP adjusted for inflation
GDP including foreign income
98
Non-Excludable & Non-Rivalrous
Club Good
Common Pool Good
Public Good
Private Good
99
Excess reserves are used to make loans.
True
False
100
The free-rider problem is
someone enjoy a good without paying
someone pays without enjoying the good
consumption that does not leave anything left to others
someone consumes too much of a good
101
What are the leakages from the circular flow?
Tax + Imports + Exports
Savings + ( Imports- exports)
Savings + Tax + Imports
Savings + Tax + Exports
102
Economic sustainability:
Companies gaining profits without thinking about environment impacts
Making sure you have more than your neighbour
Makeing a profit while at the same time consider the environment and people
Using resources selfishly and not thinking about future generations
103
What is the Financial Account?
Transactions related to the trade of goods and services
Records all transactions between a country and the rest of the world
Transactions related to financial assets and liabilities
Transactions that involve the acquisition of non-financial assets
104
What is
discretionary
fiscal policy?
normal fiscal policy, but in secret
the gov't changes policy to react to an economic situation
government spending in reaction to nothing in particular
government spending
105
What is consumer price index?
market value of the final goods and services produced in an economy
product value of final goods and services, adjusted for inflation
uses as the basket of goods the typical purchases of households
goods and services inputs used up in production
106
What is national debt?
debt owed by a state
tax on property
debt owed by the country
not enough trade
107
Study the diagram, how much does this subsidy cost the government per unit?
C-P1
P-P1
C-P
L-B
108
GDP per capita measures GDP per
person
input
country
product
109
What is comparative Advantage?
A person is able to produce more of a good than another
A person's opportunity cost to produce is lower than another
A person is able to produce less of a good than another
The opportunity cost to produce is higher than another's
110
what are interest rates
cost of spending or reward of saving
the rise in value of the pound
money loosing it's value
the difference between two currencies
111
What is the fractional reserve banking system?
A system where banks only lend money backed by physical commodities
A system where banks borrow money from other banks to maintain reserves
banks hold a fraction of their deposits as reserves and lend out the rest
A system where banks hold all deposits as reserves and do not lend money
112
What are
imports
?
taxed products
ruined products
products coming into a country
products leaving a country
113
Standard of living is...
A measure of economic wellbeing
A way of describing how 'alive' someone is
A measure of personal happiness
A way of measuring someone's quality of life
114
What is Inflation
An increase in supply
Increase in the level of prices for goods and services
Increse in aggregate demand
An increase of people living in an area
115
What is depreciation?
The increase in value
The decrease in value
Over-consumption
Under-consumption
116
Non-market production is
Goods produced outside the borders and imported
Goods and services that are not useful to citizens
Goods produced by low income earners
Goods produced by household members for themselves
117
open market operations
buying or selling bonds
selling certificates of deposit
distributing money
buying stocks
118
What is the inflation rate?
annual percentage increase in real GDP
annual percentage increase in total unemployment
annual percentage increase in the price level.
annual percentage changes the unemployment
119
What is Underemployment
Being employed “under the table”
Working a job without enough people
Being overqualified and therefore underpaid
Working a job without necessary qualifications
120
Interest on reserves balance(IORB)
Interest Rate the banks earn from Fed on the funds they deposit in account.
Someone being interested in banks.
Discount rate .
Interest rate taken by banks out of other banks to earn money.
121
Common Access Resources
are under-consumed
require subsidies
get depleted without intervention
create positive externalities
122
Which of the following goods is a club good?
Clean air
Spotify Premium
Tornado sirens
Skincare products
123
Which would be an example of a positive externality?
a thriving stock market
increased police presence
someone playing loud music everyone likes
a new law requiring strict air pollution controls
124
what does a unit of account mean?
money offers a standard measure of financial value.
Borrow money to buy goods that can't be afforded currently.
money is used to store financial value for future use
money enables people to make payments.
125
Economic growth would most likely result from —
decreased trade
increased productivity
decreased sales of stock
increased employment
126
What are bonds?
notes that promise repayment of money in the future.
chains for bondage
notes that give money to the homeless
checks and balances
127
What are tariffs
Taxes that wealthy people placed on the poor
Taxes placed on foreign goods brought into the US
Taxes placed on goods produced here
Taxes on all printed materials
128
What are automatic stabilizer?
government's attempt to stabilize the economy through taxing, govt spending
policy that does not require a new or special action to take effect
The ultimate ab crunch workout
policy that would increase tax revenue and decrease spending
129
Which Lorenze Curve indicate greater economic inequality?
Lorenz Curve B
Lorenz Curve A
They are the same
Both Curve A and B represent perfect equality
130
What is the fractional reserve banking system?
The FED can audit a bank at any time.
A bank can not lend out all its deposits.
A bank can not lend out its excess reserves.
Banks have to have fraction of the GDP available at all times.
131
What is consumption?
What people imagine
What people create
What people make
What people buy
132
Which economic system has the least inequality?
market
I've got a blank space, baby, and I'll write your name
planned
mixed
133
What are
protectionists?
Those who favor trade barriers to protect local industry.
Those who wish to protect their life savings at home.
People who aim to protect national parks.
People who favor as little trade barriers as possible.
134
What open market operation (Limited Reserves system) could return this economy to long run equilibrium?
decrease taxes
increase taxes
sell bonds
buy bonds
135
What is short run aggregate supply?
None of the above
Total amount of production in the economy
Levels that are possible
Levels of production
136
Externalities are effects of consumption and production on ____.
third parties
citizens
consumers
producers
137
Circular flow model
The businesses give people paychecks
all the above
The gov. gives money to the businesses
The people pay taxes to the gov. and taxes on goods to businesses
138
Total welfare is
The sum of consumer surplus and producer surplus.
the sum of consumer surplus and producer shortage
139
Marginal opportunity cost...
is another name for specialization
shows the total opportunity cost lost
represents inefficiency
gives the cost of producing an additional unit
140
Public goods include
banking and other financial services
child-care services
computer repair services
fire and police services
141
What is natural rate of unemployment?
higher level of GDP
normal amount of unemployment
unexpected unemployment levels
zero percent employment
142
What is a central bank?
Government bank
Retail bank
Investment bank
Credit union
143
What is free trade?
When goods are free.
The removal of tariffs, quotas and subsidies.
Selling public assets and services to private companies.
When producers are paid a fair price.
144
discouraged workers
counted in UR
not counted in UR
145
What are trade barriers?
Quotas, tariffs, or embargoes
Blockages for trade ships
Restrictions to free trade
Trade that is done secretly
146
Demand deposits = $200,000; reserve requirement = 10%. What's the value of required reserves?
$20,000
$2,000
$200,000
$180,000
147
Marginal Social Benefit=
Net Benefit
Willingness to pay
Marginal Social Cost
Quasi-Public Goods
148
In the context of public goods, what does "non-rivalrous" mean?
Consumption by one person does not affect others
Consumption by one person increases the amount available for others
Consumption by one person reduces the amount available for others
Consumption is limited to a specific group
149
Calculate
Total Welfare
45
None of the above
40
180
150
What is Real GDP
GDP
Raw GDP without any adjustments
GDP adjusted for Price Changes
151
Marginal Private Cost
Is equal to the Marginal Social Cost
Does not exist
Is greater than the Marginal Social Cost
Is smaller than the Marginal Social Cost
152
Full employment output (Y*) is:
Maximum potential usage of capital and labor resources
GDP when our economy is at “full potential”
our "target" for GDP
all of these
153
The Gini Index (AKA: Gini Coefficient)
How far the same amount of money goes in different countries
Total monetary or market value of all finished goods and services produced
This measures income inequality across a given population
A country's GDP, life expectancy, literacy, education, & standard of living
154
What is a recessionary gap?
Full employment
High inflation
Output above potential GDP
Output below potential GDP
155
A formula that measures economic inequality within a country.
Gini Index
GDP
HDI
Per capita GDP
156
How is Economic Growth measured?
Gross Domestic Product
Gross Domestic Price
Grand Domestic Price
Grand Domestic Product
157
marginal private benefit
the marginal benefit that accrues to consumers of a good
the benefit of alone time
being quaratined
a payment designed to encourage purchases
158
What is an economic PRODUCER?
someone who creates and supplies goods or services
someone who buys products
someone who only eats plants
someone who can't stand shopping
159
What is Short Run?
A period of time in which a BF cannot sell g&s
A period of time in which one or more factors are fixed
The amount of time it takes a BF to grow
A period of time long enough for BF to change all FoP
160
What is aggregate demand
The potential GDP
The amount of money that consumers spend in an economy
The value of products and services produced
The amount that consumers are willing to pay for a product
161
What are "sticky wages"?
Wages that are slow to fall
Wages that are slow to increase
Wages given in form of contracts
Wages for jobs that make you sticky
162
What is austerity?
A rise in government spending
A rise in consumer spending
A fall in tax revenue
A cut in government spending
163
What is the base year
A year that serves as a basis of comparison for other years
The average inflation percentage over several years
The average amount of goods and services produced in a year
164
Which of the following does a Lorenze curve show?
Income Slope
Poverty Rates
Income Inequality
Income Rates
165
Fiat Money
Deposits that a bank keeps readily available as opposed to lending them out
Make use ofobjects ofvalue b/c the holder can trade it for ST else of value
Anything used as money; today we use coins and paper bills as money.
Order/decree. “Lender tender” has value b/c gov't has decreed that it does.
166
What is long run?
Longer than one year
Longer than five years
When there are no fixed factors
When all factors are fixed
167
Circular flow model
caused by a mismatch between skills of workers and the requirements of jobs
Maximum price set by the government for a product or service
Rivalry between firms in the marketplace
Model that shows the flow of goods and services in an economy
168
What does money as a "store of value" mean?
Money can be created on demand
Money is universally accepted
Money holds its value over time
Money decreases in value quickly
169
What are intermediate goods?
Goods that are produced outside the country
Goods that are not sold or exchanged in an economy
Goods used in the production of other goods
Goods that were sold in earlier years
170
What is long-run self adjustment?
movement along the AD curve
Shifts of AD caused by policy makers
shifts of SRAS due to adjustement of wages and prices
shifts of LRAS due to adjustement of wages and prices
171
What is a balanced budget?
When revenue equals expenditure
When there is no government revenue
When revenue is greater than expenditure
When expenditure is greater than revenue
172
What is long-run self adjustment?
LRAS
shifts of SRAS due to adjustement of wages and prices
shifts of LRAS due to adjustement of wages and prices
movement along the curve
173
Get income, wages, salaries from resource market
Firms
Households
174
What is
cyclical unemployment
?
Unemployment caused by a downturn in the economy
Unemployment due to technological advancements
Unemployment resulting from seasonal work
Unemployment caused by workers leaving the workforce
175
What is the income effect?
Change that is shown as a hop,skip,and a jump on the graph
Change because of the change in the relative price
Change in price alters consumers' real income
176
What phase of the business cycle is point 2?
Contraction
Peak
Trough
Expansion
177
What is money?
A medium of exchange
A verbal agreement
178
A negative externality is a _____ that someone must deal with.
cost
tax
regulation
law
179
What is required reserve ratio? (required reserve)
the ratio of commercial to personal loans that a bank makes
the amount of money a bank has to loan out
the deposits that companies make in banks
the portion of a deposit that a bank must keep in cash in their vault
180
What is the product market?
income is received for supplying land, labor, or capital
payments received for selling products on the black market
households purchase goods and services that firms produce
firms purchase the factors of production from households
181
Gross Domestic Product
is last week's dirty socks
is measured using quality-of-life factors.
is the value of all goods and services produced in a year.
are the products made in other countries
182
What is a budget surplus?
When no money is borrowed
When expenditure exceeds revenue
When revenue exceeds expenditure
When revenue equals expenditure
183
What are sticky wages
Wages that adjust quickly with price level
Wages that can change in the short run
When wages don't fall with a decrease in demand
When wages fall with a decrease in demand
184
What is Investment?
purchase of stocks and bonds
consumer purchases of big-ticket items
a purchase of new capital, such as new factories or equipment
putting away funds for the future
185
What phase of the business cycle is point 1
Peak
Expansion
Trough
Contraction
186
What is one monetary policy to close a contractionary gap?
Increasing taxes
Decreasing taxes
Buying bonds
Creating a government spending program
187
What are quotas?
Roads to nowhere
Something people say in books
A limit on the amount of a good that can be imported or exported.
Things people buy at a market
188
What is economic contraction "AKA" a recession
A time when Real GDP increases
A time when GDP is decreasing
A time when Real GDP is decreasing
A time when GDP increases
189
What is a trade surplus?
imports are greater than exports
trade deficit occurs
positive balance of payments
exports are greater than value of its imports
190
The government gives a $4 per unit subsidy to producers
Supply Increase
Supply Decrease
Demand Decrease
Demand Increase
191
What business cycle phase has business failures?
Prosperity
Depression
Recession
Recovery
192
What is long run aggregate supply?
Goods and services that an economy can produce with no employment
Goods and services that an economy can’t produce with full employment
Goods and services that an economy can produce with full employment
Goods and services that an economy can produce with half employment
193
Calculate
Total Welfare
$100
$80
$240
$120
194
Where marginal social benefit = marginal social cost
Private optimum consumption
Marginal social cost
Marginal social benefit
Social optimum consumption
195
Standard of Living
Market Economy
Scarcity
Quality of life
Gross Domestic Product (GDP)
196
What is the business cycle?
the exchange of goods between different nations
the tendency of a new business to get larger each year
fluctuations in a country’s economic activity over time
the flow of money between households and businesses
197
How do you calculate the inflation rate?
price in year 2/price in year 1
(price in year 2-price level in year 1)/price in year 1
None of these are correct
(price in year 1-price in year 2)/price in year 2
198
ECONOMIC SUSTAINABILITY
Manage resources
Generates ineequitavle wealth
Helps to manage resources and generate profitability irresponsible
199
What are leakages in the circular flow model?
Money being injected into the economy
Increases in government spending
Increases in wages
Money leaving the economy through savings, taxes, and imports
200
What is commodity money?
Money that also has a use besides being money (cows)
Every kind of money
Common money
Money that can only be used as money
