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55 Cards in this Set

  • Front
  • Back
Economies with highter growth rates tend to be those that?
increase their human capital
Which of the following is NOT one of the reasons that the aggregate demand curve slopes downward?
the substituion effect
A revaluation makes?
domestic goods more expensive relative to foreign goods
Deviations in the actual rate of unemployment away from the natural rate of unemployment are called?
cyclical unemployment
Nearly all economists agree that expansionary fiscal policy can _____ aggregate ______?
increase; demand
The short-run alternation between economic downturns, recessions, and economic upturns and expansions are know as the?
business cycle
An example of a government tranfers is a(n)
Social Security payment
Which of the following represents the consensus among most economists today with respect to the management of unemployment?
Unemployment cannot be kept below the natural rate
In the long run, any given percentage increase in the money supply?
Leads to an equal percentage increase in the overall price level
If the MPC is greater than zero but less than one, then we can be sure that when disposable income rises by $1 consumption will?
Rise by less than $1
When the output gap is negative the acutal unemployment rate is?
above the natural rate
An example of human capital would be?
the job skills a person has
Public debt is
Government debt held by individuals and institutions outside the government
According to the accompanying figure, the equilibrium interest rate is
6%
The marginal propensity to consume is
0.8
Autonomous consumption is
$500
A loan is
A liability for the borrower and an asset for the lender
Shoe leather costs refer to the
increased cost of transactions due to inflation
A binding minimum wage
increases unemployment
The natural rate of unemployment is 4% and the economy is producing 95% of its potential output. Okun's law predicts an unemployment rate of
6.5%
The short-run Phillips curve shows
An inverse relationship between unemployment and inflation
According to rational expectations, monetary policy is
effective only if it is unexpected
A laptap computer purchased by an accounting firm is considered to be
investment spending
Fiat money is
None of the above
The quantity equation is
MV=PY
The classical model of the price level is much more likely to be a good approximation of reality during periods of
Expansion
In the long run, changes in the money supply
affect only the price level but they do not change aggregate output
Economists view investment spending as which of the following
spending on physical capital
Which of the following would NOT be a method by which a country could maintain a fixed exchange rate
Passing a law requiring that the exchange rate remain fixed
A minimum wage of $5.15 per hour might cause structural unemployment if the equilibrium wage in that labor market is
$4.00
Autonomous consumption is
$500
A loan is
A liability for the borrower and an asset for the lender
Shoe leather costs refer to the
increased cost of transactions due to inflation
A binding minimum wage
increases unemployment
The natural rate of unemployment is 4% and the economy is producing 95% of its potential output. Okun's law predicts an unemployment rate of
6.5%
The short-run Phillips curve shows
An inverse relationship between unemployment and inflation
According to rational expectations, monetary policy is
effective only if it is unexpected
A laptap computer purchased by an accounting firm is considered to be
investment spending
Fiat money is
None of the above
The quantity equation is
MV=PY
The classical model of the price level is much more likely to be a good approximation of reality during periods of
Expansion
In the long run, changes in the money supply
affect only the price level but they do not change aggregate output
Economists view investment spending as which of the following
spending on physical capital
Which of the following would NOT be a method by which a country could maintain a fixed exchange rate
Passing a law requiring that the exchange rate remain fixed
A minimum wage of $5.15 per hour might cause structural unemployment if the equilibrium wage in that labor market is
$4.00
The monetary policy rule suggests
the money supply need to grow at a slow and steady pace
If expected inflation decreases, the demand and supply of loanable funds
shifts up and the nominal interest rate increases
Reserve requirements
set the minimum amount of reserves a bank must hold
the advantage of a fixed exchange rate is that
it eliminates uncertainty about the value of a currency
Purchasing power parity refers to
the nominal exchange ate for which a market basket would cost the same in each country
Which of the following would be an example of an intermediate good
motor oil purchased by a taxi driver for his cab
the long-run aggregate suply curve is
vertical
According to recent estimates in Okun's law, if the unemployment rate fell by a full percentage this is most probably attributable to a
2% percent increase in real GDP
The unemployment rate is
6.25%
Which of the following would be the BEST explanation for an upward-sloping short-run aggregate supply curve?
Wages and prices of some goods are sticky in the short run