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60 Cards in this Set

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Figure 34-2, SRPC2 is based on an expected inflation rate of...

%2

Figure 34-2 SRPC1 is based on an expected inflation rate of...

%0

Unanticipated inflation...

helps borrowers and hurts lenders

Contractionary monetary policy causes ________ in the price level in the short run and ________ in the price level in the long run.

a decrease; a decrease

Which of the following will not increase the productivity of labor?

an increase in the size of the labor force

An increase in the short-run aggregate supply curve may be caused by...

an increase in productivity

Table 12-1, the unemployment rate for this economy is...

%5

According to the wealth effect, when the price level decreases, the purchasing power of assets...

increases and consumer spending increases

The reserve ratio is...

the fraction of its deposits that a bank holds as reserves

Sam is unemployed bc the steel plant in his town closed and moved to Mexico. Sam is experiencing...

structural unemployment

Suppose that a presidential candidate promised large income tax cuts. Which is most likely to occur?

An increase in aggregate demand

When the dollar value of the euro is high...

travel in the US is less expensive for Europeans

Increases in the avg level of prices is called...

inflation

Scenario 42-1 The dollar has...

depreciated

Scenario 42-1 French exports to the US will...

be more expensive

Scenario 42-1 In Germany, exports to the US...

will increase, and imports from Europe will decrease

42-1 In the US, exports to Europe...

will increase, and imports from Europe will decrease

Figure 6-1 If the prices of inputs used to produce and transport coconuts are increasing, then the movement of the model could be...

C to A

Real GDP is...

the value of the production of all the final good and services adjusted for price changes

figure 19-3 the intersection of AD with SRAS indicates...

a short-run equilibrium

Figure 19-3 the intersection of SRAS with AD ...

an economy experiencing a recessionary gap

Which transaction will be included in the official measurement of GDP?

Sean bought a new iPhone

If the Fed Reserve uses expansionary monetary policy, then...

there is a positive short-run effect on real GDP but GDP remains equal to potential GDP in the long run

Figure 28-1 If the interest rate is above the equilibrium rate, there will be an ____ money and the interest rate will _____.

excess supply of; fall

Figure 28-1 Equilibrium in this money market will occur at an interest rate _____ and quantity of money ______

r2, q1

Table 11-3 Nominal GDP in Year 4 is equal to...

$280

If a country sold more goods and services to the rest of the world than they purchased from the other countries, then the country has a...

trade surplus

Figure 31-3 If the economy is experiencing a recessionary gap, the Fed would _____govt bonds, which would _____ the money supply and _____ interest rates. This is shown in Panel ____.

buy; increase; decrease; (a)

31-3 Panel _____ illustrates what happens when the Fed decides to _____govt bonds and _____ the money supply.

(b); sell; decrease

31-3 Panel (a) illustrates what happens when the Fed decides to ____ the money supply and _____ the interest rates

increase; decrease

31-3 If the Fed intended to encourage investment and expand the economy , it would ______ govt bonds, _______ the money supply, and ______ interest rates. This is shown in Panel _____.

buy; increase; decrease; (a)

25-1 If the resrev ratio is %25, loans are...

$60,000

25-1 if the reserve ratio is %25, deposits are...

$80,000

Which accurately portrays the shape of a long-run Phillips curve?

vertical

A tradeoff between unemployment and inflation is depicted by...

a Phillips curve

The major tools of monetary policy available to the Fed Reserve System include...

reserve requirements, open-market reg, and the discount rate

The sequence of business-cycle phases is...

peak, recession, trough, expansion

29-11 if the money supply is currently at MS1 and the central bank chooses to buy bonds, then the resulting short-run shift int he supply of savings may be represented by a shift of the...

supply of loanable funds from S1 to S2 and a lower interest rate

29-11 If the money supply is currently at MS2 and the central bank chooses to sell bonds, then the resulting short-run shift in the supply of savings may be rep by a shift of the

supply of loanable funds from S2 to S1 and a higher interest rate

3-2 if the economy is producing at alt X the opportunity cost of producing y is _____ units of consumer goods...

6

20-4 the movement fro AD1 to AD3 could be caused by...

increased govt purchases

20-4 At E1 the ecomony

has a recessionary gap

table 4-1 the table shows the maximum amounts of coffee and salmon the Brazil and Alaska can produce if they just produce one good. The opportunity cost of producing 1 unit of coffee for BRazil is...

1/2 salmon

An example of cyclical unemployment is a(n)

autoworker who is laid off from an automobile company due to a decline in sales caused by a recession

The skills, training, and education possessed by workers contribute to economic growth and are known as...

human capital

Suppose the Fed buys $50 mil in Treasury bills from commercial bank. If the reserve ratio is %10, the monetary supply might eventually ____ by _____

increase; %500 mil

Agg demand will increase if

the public becomes more optimistic about future income

The Fed Res System is the _____ for the US

central bank

Stagflation is a combination of

unemployment and inflation

According to the short-run agg supply curve, when the ____ rises, the quantity of ____ rises

agg price level, agg output supplied

Over the past several years, consumer tastes for tattoos have increased. This means that the ____ for tattoos has ______

demand; increased

suppose you are told that the short-run Phillips curve has shifted upwards. Which of the following must have happened?

The SRAS curve has shifted to the left

Which qualifies as an asset from the viewpoint of a household?

a house

GDP is the sum of

personal consumption, investment, govt purchases, and net exports

figure 2-1 Point B on this graph shows

a peak

figure 2-1 the movement from Point B to C is called

an expansion

a general increase in wages will result in the

short-run agg supply shifting to the left

the labor force is defined as

the total of the persons employed and unemployed

when the Fed govt finances a deficit, the govt may

borrow funds

if the Fed Reserve wanted to increase the money supply, it could

decrease the required reserve ratio, decrease the discount rate, buy bonds on the open market