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