Macroecon Test 2

Front 1

Monatary Base

Back 1

Currency and circulation + bank reserves

Front 2

Agregitie supply growth

Back 2

Worker productivity and labor force growth

Front 3

When AS growth is bigger than AD growth there is ...

Back 3

excess capacity and can create a recession and less than full unemployment and higher than 5%m low inflation

Front 4

If AS growth is less than AD growth....

Back 4

this is a peak economy, unemployment is low at less than 4%, but high inflation

Front 5

GDP

Back 5

C(Y-T) + I (R) + G + NX

Front 6

Government Multipliers

Back 6

Change in GDP divided by change in govermnet = 1 divided by 1-marginal propensity to consume

Front 7

Crowding out

Back 7

Government increases without changing taxes
Public savings = T- G

Front 8

Marginal Tax Rate

Back 8

Tax rate on last doller of income

Front 9

Progressive Tax Policy

Back 9

Marginal Tax Rate increaees as Income increases example being income tax

Front 10

Regressive Tax Policy

Back 10

MTR decreases as Income increases example being payroll tax

Front 11

Bushes impact of income tax cuts

Back 11

By cutting income tax the overall system I less progressive, most benefits to wealthy

Front 12

Borjas on Immigration

Back 12

1. - Immigratnts close subsititute for low-skill US workers
2.- Immigration is going to increase supply of low-skill workers in US
3.- Net economic benefit rich get richer, poor get poorer redistributing wealth

Front 13

card on Immigration

Back 13

1.Not substitutes just taking jobs people don’t want
2.- Outsourcing of jobs decreases demand for low-skilled workers

Front 14

3 Roles of Money

Back 14

1. - Medium of Exchange :can be used for transactions
2. - Unit of Account: quote prices uniformally across our economy
3.- Store of value: People can save

Front 15

2 Types of money

Back 15

1. - Commodity: outside value
2.- Fiat: Type of money used today, no outside value, trust government to maintain value

Front 16

Monatary Base

Back 16

Currency and circulation + bank reserves

Front 17

Agregitie supply growth

Back 17

Worker productivity and labor force growth

Front 18

When AS growth is bigger than AD growth there is ...

Back 18

excess capacity and can create a recession and less than full unemployment and higher than 5%m low inflation

Front 19

If AS growth is less than AD growth....

Back 19

this is a peak economy, unemployment is low at less than 4%, but high inflation

Front 20

GDP

Back 20

C(Y-T) + I (R) + G + NX

Front 21

Government Multipliers

Back 21

Change in GDP divided by change in govermnet = 1 divided by 1-marginal propensity to consume

Front 22

Crowding out

Back 22

Government increases without changing taxes
Public savings = T- G

Front 23

Marginal Tax Rate

Back 23

Tax rate on last doller of income

Front 24

Progressive Tax Policy

Back 24

Marginal Tax Rate increaees as Income increases example being income tax

Front 25

Regressive Tax Policy

Back 25

MTR decreases as Income increases example being payroll tax

Front 26

Bushes impact of income tax cuts

Back 26

By cutting income tax the overall system I less progressive, most benefits to wealthy

Front 27

Borjas on Immigration

Back 27

1. - Immigratnts close subsititute for low-skill US workers
2.- Immigration is going to increase supply of low-skill workers in US
3.- Net economic benefit rich get richer, poor get poorer redistributing wealth

Front 28

card on Immigration

Back 28

1.Not substitutes just taking jobs people don’t want
2.- Outsourcing of jobs decreases demand for low-skilled workers

Front 29

3 Roles of Money

Back 29

1. - Medium of Exchange :can be used for transactions
2. - Unit of Account: quote prices uniformally across our economy
3.- Store of value: People can save

Front 30

2 Types of money

Back 30

1. - Commodity: outside value
2.- Fiat: Type of money used today, no outside value, trust government to maintain value

Front 31

If AS growth is less than AD growth

Back 31

: this is a peak economy, unemployment is low at less than 4%, but high inflation

Front 32

GDP

Back 32

= C + I + G + NX

Front 33

Tax Multiplier

Back 33

Change in GDP/change in T = - MPC/1-MPC

Front 34

With an increase in government spending the government multiplier will

Back 34

increase in speingng and cause crowding out

Front 35

Federal reserve Open Market Operations wants to increae Aggregite demand growth

Back 35

there going to purchase bonds from banks which will lead to the federal funds decreae and increase income

Front 36

Federal reserve Open Market Operations wants to decrease AD there going to

Back 36

sell bonds and Federal Funds rate will increase leading to a decrease in investment

Front 37

Open Market Operations

Back 37

change banks reserves which wil change the federal funds rate which should change the money supply which should change long term interest rate, which should effect investment which will effect AD growth

Front 38

- Types of Unemployment

Back 38

o Frictional: voluntary ( transition between jobs or leaving college and getting a job.
o Seasonal
o Structural
• Occupational: Skills don’t atch
• Regional: Job not in area (not easy to get to)
o Cyclical: Business cycle downturn

Front 39

If AS growth is less than AD growth

Back 39

: this is a peak economy, unemployment is low at less than 4%, but high inflation

Front 40

GDP

Back 40

= C + I + G + NX

Front 41

Tax Multiplier

Back 41

Change in GDP/change in T = - MPC/1-MPC

Front 42

With an increase in government spending the government multiplier will

Back 42

increase in speingng and cause crowding out

Front 43

Federal reserve Open Market Operations wants to increae Aggregite demand growth

Back 43

there going to purchase bonds from banks which will lead to the federal funds

Front 44

Federal reserve Open Market Operations wants to decrease AD there going to

Back 44

sell bonds and Federal Funds rate will increase leading to a decrease in investment

Front 45

Open Market Operations

Back 45

change banks reserves which wil change the federal funds rate which should change the money supply which should change long term interest rate, which should effect investment which will effect AD growth

Front 46

- Types of Unemployment

Back 46

o Frictional: voluntary ( transition between jobs or leaving college and getting a job.
o Seasonal
o Structural
• Occupational: Skills don’t atch
• Regional: Job not in area (not easy to get to)
o Cyclical: Business cycle downturn

Front 47

Agreigate demand growth-

Back 47

GDP growth