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227 Cards in this Set
- Front
- Back
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Chapter 3
Define demand |
The entire relationship between the quantity of product that buyers wish to purchase per period time and the price of that product..
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Chapter 3
State the law of demand |
The assertion that market price and quantity demanded in the market vary inversely with one an other, that is, that demand curves are negatively sloped. Assuming all other things being equal (ceteris paribus) .
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Chapter 3
Give an explanation for the inverse relationship between price and quantity demanded |
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Chapter 3
Graph the demand curve when you're given a demand schedule |
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Chapter 3
Explain the difference between individual demand and market demand |
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Chapter 3
List five major determinants of demand |
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Chapter 3
Explain how each determinant of demand shifts the demand curve |
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Chapter 3
Explain how changes in income affect the demand for normal goods and inferior goods |
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Chapter 3
Explain how changes in the prices of substitute goods or complement three good affect the demand for product |
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Chapter 3
Distinguish between changing demands and change in quantity demanded |
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Chapter 3
Define supply |
Finish
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Chapter 3
State the law of supply |
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Chapter 3
Graph supply curve when given a supply schedule |
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Chapter 3
Explain the difference between individual supply and market supply |
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Chapter 3
List the major determinants of supply |
Finish
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Chapter 3
Explain how each determinant of supply shifts the supply curve |
Finish
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Chapter 3
Distinguish between changes in supply and changes in the quantity supplied |
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Chapter 3
Describe how equilibrium price and quantity are determined in a competitive market |
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Chapter 3
Find surplus and shortage |
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Chapter 3
determine when you are given the demand for in the supply of a good the equilibrium price and equilibrium quantity |
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Chapter 3
Explain the meaning of the rationing function of prices |
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Chapter 3
Distinguish between productive efficiency and allocative efficiency |
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Chapter 3
Predict the effects of changes in demand on equilibrium price and quantity |
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Chapter 3
Predict the effects of changes in supply on equilibrium price and quantity |
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Chapter 3
Predict the effects of changes in both demand and supply on equilibrium price and quantity |
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Chapter 3
Explain the economic effects of the government set price ceiling on product price and quantity |
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Chapter 3
Describes the economic consequences of a government set price floor on product by price and quantity |
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Chapter 1
Use a budget line to illustrate trade-off in opportunity costs |
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Chapter 1
Describe the economizing problem for society |
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Chapter 1
Define the four types of economic resources for society |
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Chapter 1
State the four assumptions made when a production possibilities table or curve is constructed |
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Chapter 1
Construct a production possibilities curve when given data |
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Chapter 1
Define opportunity cost and use a production possibilities curve to explain the concept |
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Chapter 1
Show how the law of increasing opportunity cost is reflected in the shape of the production possibilities curve |
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Chapter 1
Explain the economic rationale for the law of increasing opportunity costs |
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Chapter 1
Use marginal analysis to define optimum allocation |
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Chapter 1
Explain how optimal allocation determines the optimal point on production possibilities for |
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Chapter 1
Use a production possibilities curve to illustrate unemployment |
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Chapter 1
Use the production possibilities curve to illustrate economic growth |
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Chapter 1
Explain how international trade affects nations production possibilities curve |
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Chapter 1
Give other applications of the production possibilities model |
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Chapter 1
Identify and explain the five pitfalls to sound economic reasoning |
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Chapter 4
What is negative externality |
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Chapter 4
What is positive externality |
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Chapter 4
Explain why competitive market fails to allocate resources efficiently when there are external costs and benefits |
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Chapter 4
List action's government can take to reduce external costs |
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Chapter 4
List actions government can take to encourage external benefits |
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Chapter 4
What is a public good |
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Chapter 4
What is a quasi public good |
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Chapter 4
Marginal tax rate |
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Chapter 4
Average tax rate |
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Chapter 4
What is the difference between marginal tax rate and average tax rate How do you calculate each |
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Chapter 5
Explain the basic principle of comparative advantage |
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Chapter 5
Computer comparative cost of production from a given an example with cost data for two countries |
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Chapter 5
Determine which two countries has a comparative advantage in the example |
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Chapter 5
Indicate the range in which the terms of trade will be found in an example |
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Chapter 5
show the gains from specialization and trade in an example |
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Chapter 6
Explain why macroeconomics must take into account expectations and shocks |
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Chapter 6
Distinguish between demand shocks and supply shocks |
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Chapter 6
Discuss one demand shocks present a major problem for the macro economy |
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Chapter 6
Illustrate graphically what happens for a firm where there is demand shock and prices are flexible |
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Chapter 6
illustrate graphically what happens for a firm when there is demand shock and prices are inflexible or sticky or sticky |
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Chapter 6
Explain how firms use inventories to adjust to demand shocks |
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Chapter 6
Describe the effects of demand shocks on outputwhen prices are inflexible or sticky |
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Chapter 6
Describe the effects of demand shocks on inventory when prices are inflexible or sticky |
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Chapter 6
Cite economic evidence of stickiness of prices |
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Chapter 6
Present two reasons why prices are often inflexible in the short run |
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Chapter 7
List two types of nonproduction transactions that are excluded from GDP |
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Chapter 7
Describe the relationship between expenditures and income approaches to GDP accounting |
Finish
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Chapter 7
List three types of expenditures included in personal consumption (C) |
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Chapter 7
Identify three items including Gross private domestic investment (Ig) |
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Chapter 7
Explain how positive or negative changes in inventories affect investment |
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Chapter 7
Distinguish between gross and net investment |
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Chapter 7
Discuss differences in the amount of net investment affect the production capacity of the economy |
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Chapter 7
List two components included in government purchases (G) |
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Chapter 7
Describe the meaning and calculation of net exports (Xn) |
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Chapter 7
Compute GDP using the expenditures approach when given national income accounting data |
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Chapter 7
Identify six income items that make up the US national income |
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Define economic growth in two different ways
Chapter 8 |
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Use of the rule of 72 to show how different growth rates affect real domestic output over time
Chapter 8 |
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Discuss reasons for uneven distribution of economic growth in modern times
Chapter 8 |
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List and describe six institutional structures that promote economic growth
Chapter 8 |
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Identify four supply factors that are the ingredients of economic growth
Chapter 8 |
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Explain the demand factor as an ingredient of economic growth
Chapter 8 |
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Describe the efficiency factor as an ingredient of economic growth
Chapter 8 |
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Show graphically how economic growth shifts the production possibilities curve
Chapter 8 |
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Describe the main sources of growth and productivity of labor in the United States and state their relative importance
Chapter 8 |
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Explain what is meant by the business cycle
Chapter 9 |
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Describe the four phases of a generalized business cycle
Chapter 9 |
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Explain the relationship between business cycles and economic shocks to the economy
Chapter 9 |
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Describe the immediate cause of the cyclical changes in the levels of real output and employment
Chapter 9 |
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Identify differences in the way cyclical folk wages affect industries producing capital and consumer durable goods and how they affect industries producing consumer non-durable goods and services
Chapter 9 |
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Describe how the Bureau of Labor Statistics measure the rate of unemployment and list to criticisms of their survey data
Chapter 9 |
Finish
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Distinguish among frictional, structural, and cyclical types of unemployment.
Explain the causes of these three kinds of employment Chapter 9 |
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Define full employment
Chapter 9 |
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Define the full employment unemployment rate or the natural rate of unemployment
Chapter 9 |
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State Okuns law on the economic cost of unemployment
Chapter 9 |
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Discuss the unequal burdens of unemployment
Chapter 9 |
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Describe the non-economic costs of unemployment
Chapter 9 |
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Explain how consumption and saving are related to disposable income
Chapter 10 |
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Draw a graph to illustrate the relationships among consumption, saving and disposable income
Chapter 10 |
Finish
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Construct a hypothetical consumption schedule
Chapter 10 |
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Construct a hypothetical saving schedule and identify the level of break even income
Chapter 10 |
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Compute the four propensities
APC APS MPC and MPS when given the necessary data Chapter 10 |
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State the relationship between the APC and APS as income increases
Chapter 10 |
Finish
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Demonstrate that the MPC is the slope of the consumption schedule and the MPS is the slope of the saving schedule
Chapter 10 |
Finish
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Explain each of the four non-income determinants of consumption and saving
Chapter 10 |
Finish
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Use a graph with real GDP on the horizontal axis to show shifts in consumption and saving schedules
Chapter 10 |
Finish
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Explain the difference between a change in the amount consumed or saved in a change in the consumption or saving schedule
Chapter 10 |
Finish
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Describe how a change in taxes shifts consumption and saving schedules
Chapter 10 |
Finish
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Explain how the expected rate of return affects investment decisions
Chapter 10 |
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Describe the influence of the real interest rate on investment decision
Chapter 10 |
Finish
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Draw a graph of investment demand curve for the business sector and explain what it shows
Chapter 10 |
Finish
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Explain how each of the six non-interest determinants of investment will shift the investment demand curve
Chapter 10 |
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Define the multiplier effect in words the ratio using equation
Chapter 10 |
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Make three clarifying points about the multiplier
Chapter 10 |
Finish
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Cite two facts on which the rationale for the multiplier is based
Chapter 10 |
Finish
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Describe how a change in taxes shifts consumption and saving schedules
Chapter 10 |
Finish
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Explain how the expected rate of return effects investment decisions
Chapter 10 |
Finish
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Described the influence of the real interest rate on investment decision
Chapter 10 |
Finish
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Draw a graph of investment demand curve for the business sector and explain what it shows
Chapter 10 |
Finish
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Explain how each of the six non-interest determines of investment will shift the investment demand curve
Chapter 10 |
Finish
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Give four reasons why investment spending tends to be unstable
Chapter 10 |
Finish
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Define the multiplier effect in words with a ratio and using an equation
Chapter 10 |
Finish
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Describe the history, assumptions, and simplifications underpinning the aggregate expenditures model
Chapter 11 |
Finish
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Construct an investment schedule showing the relationship between planned investment and GDP
Chapter 11 |
Finish
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Combine the consumption and investment schedule to form an aggregate expenditures scheduled to explain the equilibrium levels of output income and employment in a private closed economy
Chapter 11 |
Finish
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Explain why the economy will tend to produce its equilibrium GDP rather than some smaller or larger level of real GDP
Chapter 11 |
Finish
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Illustrate graphically equilibrium in aggregate expenditure model with consumption and investment components
Chapter 11 |
Finish
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Discuss why equilibrium in real GDP changes when the aggregate expenditure schedule shifts upward due to an increase in investment spending
Chapter 11 |
Finish
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Use the concept of net exports to define aggregate expenditures in an open economy
Chapter 11 |
Finish
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Describe the net export schedule and its relationship to real GDP
Chapter 11 |
Finish
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Explain what the equilibrium real GDP and open economy will be when net exports are positive and when net exports are negative
Chapter 11 |
Finish
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Give three examples of how circumstances or policies abroad can affect domestic GDP
Chapter 11 |
Finish
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List three simplifying assumptions used to add the public sector to the aggregate expenditures model
Chapter 11 |
Finish
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Find the equilibrium real GDP in an economy in which the government purchases goods and services when the tabular or graphical data is given
Chapter 11 |
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Determine the effect on equilibrium real GDP one lump-sum taxes are included in the aggregate expenditures model
Chapter 11 |
Finish
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Explain the meaning of a recessionary gap and calculate one when you're provided with data
Chapter 11 |
Finish
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Define inflationary expenditure gap and calculate one when you're provided with relevant data
Chapter 11 |
Finish
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Apply the concepts of recessionary and inflationary gaps to two historical event in the United States
Chapter 11 |
Finish
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Define aggregate demand
Chapter 12 |
Finish
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Describe the characteristics of the aggregate demand curve
Chapter 12 |
Finish
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Use the real balances interest rate foreign purchased effects to explain why the aggregate demand curve slopes downward
Chapter 12 |
Finish
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Use a graph to distinguish between a movement along a fixed aggregate demand curve and a shift in aggregate demand
Chapter 12 |
Finish
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Keep an example of the effect of the multiplier on any increase in aggregate demand
Chapter 12 |
Finish
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Explain the four factors that can change the consumer spending determinant of aggregate demand
Chapter 12 |
Finish
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Explain two factors that can change the investment spending determinant of aggregate demand
Chapter 12 |
Finish
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Explain what changes the government spending determinant of aggregate demand
Chapter 12 |
Finish
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Explain the two factors that can cause changes in the export spending determinant of aggregate demand
Chapter 12 |
Finish
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Discuss how the four major spending determinants of aggregate demand and their underlying factors can increase or decrease aggregate demand
Chapter 12 |
Finish
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Define aggregate supply in the immediate short run, short run, and long
Chapter 12 |
Finish
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Explain why the aggregate supply curve in the immediate short runs horizontal
Chapter 12 |
Finish
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Explain why the aggregate supply curve in the short run is up sloping
Chapter 12 |
Finish
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Explain why the aggregate supply curve in the long run is vertical
Chapter 12 |
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Identify the three major spending determinants of aggregate supply
Chapter 12 |
Finish
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Describe two factors that change the input prices determined of aggregate supply
Chapter 12 |
Finish
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Explain what changes the productivity determinant of aggregate supply
Chapter 12 |
Finish
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Identified two factors that change the legal institutional environment determined of aggregate supply
Chapter 12 |
Finish
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Explain how the three major determinants of avid supply and their underlying factors can increase or decrease aggregate supply
Chapter 12 |
Finish
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Explain why in equilibrium the economy will produce a particular combination of real output in the price level rather than another combination
Chapter 12 |
Finish
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Show the effects of increasing aggregate demand on the real output and the price level and related changes to demand pull inflation
Chapter 12 |
Finish
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Illustrate the effects of the decreasing admit demand on real output and the price level and economy relate the changes to the recession and unemployment
Chapter 12 |
Finish
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Explain the effects of the decreasing aggregate supply on real output and the price level and related changes to cost push inflation
Chapter 12 |
Finish
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Give five reasons for downward inflexibility of changes in the price level when aggregate demand decreases
Chapter 12 |
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Distinguish between discretionary and nondiscretionary fiscal policy
Chapter 13 |
Finish
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Explain expansionary fiscal policy on aggregate demand and price level is inflexible downward
Chapter 13 |
Finish
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Compare and contrast expansionary fiscal policy through increased government spending or decreased taxation
Chapter 13 |
Finish
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Describe contractionary fiscal policy on aggregate demand when the price level is inflexible downward
Chapter 13 |
Finish
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Compare and contrast a contractionary fiscal policy decreased government spending were increased taxation
Chapter 13 |
Finish
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Assess whether it is preferable to use government spending or taxes to counter recession or reduce inflation
Chapter 13 |
Finish
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Explain the relationship between net tax revenues and GDP
Chapter 13 |
Finish
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Describe automatic or built-in stabilizers and their economic importance
Chapter 13 |
Finish
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Indicate how the built-in stabilizers help to counter recession and inflation
Chapter 13 |
Finish
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Describe how automatic stabilizers are affected by different tax systems progressive, proportional, and regressive
Chapter 13 |
Finish
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Distinguish between the actual budget and a standardized budget for evaluating discretionary fiscal policy
Chapter 13 |
Finish
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Describe recent US fiscal policy using the standardized budget
Chapter 13 |
Finish
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Discuss current thinking on fiscal policy
Chapter 13 |
Finish
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Listed explained three functions of money
Chapter 14 |
Finish
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Describe liquidity of an asset
Chapter 14 |
Finish
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Define M1 money
Chapter 14 |
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Describe characteristics of currency component of M1
Chapter 14 |
Finish
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Explain the role of checkable deposits as a component of M1
Chapter 14 |
Finish
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Describe the two major types of institutions offering checkable deposits
Chapter 14 |
Finish
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Offer two qualifications about what is excluded from the money supply
Chapter 14 |
Finish
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Define M2 money
Chapter 14 |
Finish
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Describe the components of M2 money
Chapter 14 |
Finish
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Distinguish between credit cards and money
Chapter 14 |
Finish
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Explain when money is debt in the US economy and who holds that debt
Chapter 14 |
Finish
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State three reasons that currency checkable deposits are money and have value
Chapter 14 |
Finish
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Describe the framework of the Federal Reserve
Chapter 14 |
Finish
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Explain the historical background of the Federal Reserve
Chapter 14 |
Finish
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Describe the purposes of the Board of Governors of the Federal Reserve
Chapter 14 |
Finish
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Explain why the federal reserve banks are central was a public and bankers banks
Chapter 14 |
Finish
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Discuss the functions of the FOMC of the Federal Reserve
Chapter 14 |
Finish
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Discuss the relationship between the Federal Reserve and commercial banks and thrifts
Chapter 14 |
Finish
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List and explain the seven major functions of the Federal Reserve system and indicate which one is most important
Chapter 14 |
Finish
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Discuss the reason for the independence of the Federal Reserve
Chapter 14 |
Finish
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What happens with banks balance sheet when the bank is created it buys property and equipment and it accepts deposits
Chapter 15 |
Finish
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Explain the effects of the deposit of currency in a checking account on the composition and size of the money supply
Chapter 15 |
Finish
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Defined the reserve ratio
Chapter 15 |
Finish
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Computer banks required and excess reserves were given a good balance sheet figures
Chapter 15 |
Finish
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Explain why commercial bank is required to maintain a reserve and why of a required reserve is not sufficient to protect depositors from losses
Chapter 15 |
Finish
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State the money creating potential of a commercial bank the amount of money a commercial bank can safely create by lending or buying securities
Chapter 15 |
Finish
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Explain how commercial banks balance sheet reflects the bankers pursuit of the two conflicting goals of profit and liquidity
Chapter 15 |
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State the money creating potential of the banking system
Chapter 15 |
Finish
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Explain how it is possible for a banking system to create an amount of money that is a multiple of its excess reserves when no individual commercial bank ever creates money in an amount greater than its excess reserve
Chapter 15 |
Finish
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Define the monetary multiplier
Chapter 15 |
Finish
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Define the monetary multiplier
Chapter 15 |
Finish
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Use the monetary multiplier and the amount of excess reserves to compute the money creating potential of the banking system
Chapter 15 |
Finish
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Illustrate with an example using the monetary multiplier how money can be destroyed in the banking system
Chapter 15 |
Finish
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Give a definition of the asset demand for money
Chapter 16 |
Finish
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Illustrate graphically how the transactions and acid demands for money combined to form the total demand for money
Chapter 16 |
Finish
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Describe the market for money and what determines equilibrium rate of interest
Chapter 16 |
Finish
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Explain how changes in the normal GDP and in the money supply affect the interest rate
Chapter 16 |
Finish
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Illustrate with an example how the disequilibrium in the market for money is corrected to changes in bond prices
Chapter 16 |
Finish
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List the important assets and liabilities of the Federal Reserve's
Chapter 16 |
Finish
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Identify four tools of monetary policy
Chapter 16 |
Finish
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Explain how the Federal Reserve can expand the money supply by buying government securities from commercial banks and from the public
Chapter 16 |
Finish
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Explain how Federal Reserve can contract the money supply by selling government securities to commercial banks and the public
Chapter 16 |
Finish
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Describe how raising or lowering the reserve ratio can increase or decrease the money supply
Chapter 16 |
Finish
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Illustrate how raising or lowering the discount rate can increase or decrease the money supply
Chapter 16 |
Finish
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Explain how the Federal Reserve uses the term auction facility to alter bank reserves and bank lending
Chapter 16 |
Finish
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Discuss the relative importance of monetary policy tools
Chapter 16 |
Finish
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Explain how the Federal Reserve uses monetary policy to target the federal funds rate
Chapter 16 |
Finish
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Describe the actions affecting take to pursue an expansionary monetary policy
Chapter 16 |
Finish
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Describe the relationship between the federal funds rate and the prime interest rate
Chapter 16 |
Finish
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Describe the actions the second takes pursue a restrictive monetary policy
Chapter 16 |
Finish
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