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48 Cards in this Set
- Front
- Back
What question is a basic question economics need to answer? |
For whom are goods and services produced? |
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Match each core idea of economic thinking to its definition: |
-What must be given up to get something: Opportunity Cost -What is gained when a person gets something: Benefit -A decision that uses the available resources to best achieve the objective: Rational Choice -A reward that encourages action: Incentives |
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What is true regarding human capital? |
Human Capital affects the quality and productivity of labor |
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A company has the production possibilities of bicycle and helmets in a month? |
600 bicycles;400 helmets |
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Which situation increases current demand of a good? |
the expectation of a higher future price. |
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If the demand for used cars decreases after the price of new cars falls, what is true about the used and new cars? |
They are both substitute goods |
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How is the quantity of demand affected when there is an increase in demand, assuming supply is constant? |
The price will increase ans the quantity will decrease. |
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Which two situations increase the supply of a perishable product? |
-An increase in the expected future price of the product. -Lower prices for the resources used to produce the product. |
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Which situation increases the supply of gasoline? |
A decrease in the price of a resource used to produce gasoline, such as a crude oil. |
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What can cause an increase in the quantities supplied of ballpoint point pens? |
When there is an increase in demand |
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Which item would be excluded fro Canada's GDP measure? |
Gasoline purchased in the US by a tour bus operator in Quebec. |
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A sugar cane farm was affected by a devastating hurricane that decreased the supply of sugar by 30 percent. Because if the reduced supply of sugar, the chocolate cake factory in Country A was only able to produce half of the number of last year's cakes. -What effect will the decrease of sugar supply have on the chocolate cake's market equilivrium? |
The price of chocolate cake must increase in order to maintain market equilibrium. |
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Classify the descriptions as a feature of real or nominal GDP. |
-A better measure of a standard of living-Real GDP -Expressed in terms of prices of the current year-Nominal GDP -Expressed in terms of the prices of a base year-Real GDP -Allows output to be compared across time-Real GDP |
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Which purchase is included when calculating a country's GDP per capita? |
A new automobile |
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Which event is likely to cause inflation? |
An increase in crude oil prices. |
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How frequently does the Bureau of labor statistics conduct its survey of the CPI market basket to determine CPI? |
Monthly |
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Which condition must exist for full employment to occur? |
the absence of cyclical emploiyment
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How will the GDP be affected when unemployment is higher than the natural unemployment rate? |
-The real GDP minus the potential GDP will be negative -The real GDP will be below potential GDP |
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What do sustained increase in the standard of living depend on? |
Increases in labor productivity |
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Economic growth in Cuba has been slow. What can best explain the slow growth? |
Lack of incentive mechanisms and economic freedom |
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What would be a reason for an increase in labor productivity growth? |
An increase in people's human capital |
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Which term characterizes the situation where the current unemployment rate is equal to the natural unemployment rate? |
Full employment |
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What is the function of money when there is a price tag? |
A unit of account |
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What is the goal of a commercial bank? |
To maximize its stockholders' wealth |
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Cisco is considering opening a financial institution that accepts savings deposits from only its employees and makes loans to only employees. What is the best description of the financial institution? |
Credit union |
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What is an open market operation? |
One of the tools of the monetary policy that the federal reserve uses to influence money supply. |
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Who regulated the quantity of money circulating in the economy? |
The Federal Reserve |
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What can the Federal Reserve System immediately adjust in order to influence the interest rate? |
Reserves of the banking system |
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What are open market operations? |
Purchase or sale of engorgement securities by the Federal Reserve |
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Which cost would be labeled as uncertainty costs? |
Cost associated with predicating long-term inflation |
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What is the result of an increase in price level, other things remaining the same? |
Increase in the quantity of real GDP supplied |
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Moving along the aggregate supply curve, what is the result when the price level increases? |
The real wage rate falls and there is an increase in the quantity of real GDP supplied
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Classify each scenario with how it impacts aggregate demand. |
-U.S currency exchange rate appreciates-Decrease AD -Interest rates rise-Decrease AD -Quantity of money increases-Increase AD -U.S net exports increase-Increase AD |
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What happens in the business cycle when aggregate demand increases? |
The economy expands ans inflation may occur |
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Why do money wage rates rise when an economy has demand-pull inflation? |
A decrease in aggregate demand creates a labor shortage |
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What are the policy targets of the Philips curve? |
Inflation rate and unemployment rate |
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Which graph demonstrates the generally accepted view of inflation on the long-run Philips curve? |
Choose the graph with the vertical line |
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Which parties decide the federal budget? |
President of the U.S and U.S Congress |
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The above table gives the government outlays and tax revenue from 2008 through 2012 for country A-What was the state of Country A's budget in 2011? |
Balanced Budget |
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Classify each action with the effect on the aggregate supply side: Check |
Decrease in productivity-Decrease in AS Increase in income taxes-Decreases in AS Increase of infrastructure projects-Increase in AS Decrease in unemployment-Increase in AS |
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What would happen to AD if the gov expenditure on goods and services increase by 20 billion? |
AD would increase by more than 20 million |
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Which factor is a key part of achieving maximum employment? |
Attaining the highest sustainable growth rate of potential GDP |
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What is the best indication that the Federal Reserve is achieving its goal of price level stability? |
A yearly core inflation rate that is closer to 1 to 2 percent than 9 to 10 percent |
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What is one strategy the FOMC uses to fight inflation? |
Taking actions that will increase real GDP? |
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What would happen to AD expenditures if the Federal reserve raised the federal funds target rate? |
Consumption expenditures would likely decrease |
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What happens after a nation starts importing a good from overseas? |
the domestic price of the good falls |
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What consumer gain results from a tariff imposes on a good? |
Products of increased quality |
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If supporters of restrictions on imports argue that protection is needed to preserve a strategic industry, which argument is being used? |
Save domestic jobs argument |