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19 Cards in this Set
- Front
- Back
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Short-run fluctuations in output and employment is called what? |
The business cycle
Pg. 116 |
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Economic growth in an economy is best measured from one year to the next by comparing the change in what? |
Real GDP
pg. 117 |
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Unemployment is undesirable because it... |
Wastes labor resources
Pg. 117 |
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A major problem with inflation is that it... |
Reduces purchasing power
Pg. 117 |
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A question that a macroeconomic model would help clarify is.... |
Can governments promote long-run economic growth?
Pg. 118 |
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What was the average percentage increase in the output of the US from 1995 to the start of the 2007-2009 recession? |
2.7 percent
Pg. 118 |
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Before the industrial revolution began in England in the late 1700's, standard of living showed... |
Virtually no growth
Pg. 118 |
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Modern economic growth is characterized as a situation in which... |
Output per person is rising
Pg. 118 |
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An annual growth rate of 2 percent implies that the standard of living in an economy will double in |
35 years
Pg. 118 |
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What accounts for the vast differences in the living standards today between the rich and poor countries? |
Modern economic growth |
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About how many times greater, on average, are the material standards of living of citizens in the richest nations compared to that of the poorest nations? |
50 times greater
Pg. 119 |
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When current spending is less than current income it does what? |
Generates savings
Pg. 119 |
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New computers are purchased to improve data analysis is an example of? |
Economic investment by a business
Pg. 120 |
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The reason that economic investment is important is because it... |
Enables higher levels of consumption in the future.
Pg. 119-120 |
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A well-functioning banking and financial system helps to promote economic growth and stability by... |
Directing savings to the most productive investments
Pg. 120 |
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If people and businesses hold positive attitudes about the future they are more likely to... |
Save more and invest more
Pg. 120 |
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Macroeconomic behavior is mostly influenced by... |
Expectations about the future
Pg. 120 |
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When demand turns out to be lower than expected it is called what? |
Negative demand shock
Pg. 121 |
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Macroeconomic models of the economy over the long term are more likely to assume that the economy has what? |
Flexible prices
Pg. 126 |
