Podcast
Questions and Answers
Which of the following is a type of inflation that is generally defined as price increases of 50% or more per month?
Which of the following is a type of inflation that is generally defined as price increases of 50% or more per month?
- Structural
- Hyperinflation (correct)
- Frictional
- Deflation
What is the economic situation defined by an inefficient distribution of goods and services in the free market called?
What is the economic situation defined by an inefficient distribution of goods and services in the free market called?
- Negative externality
- Positive externality
- Market failure (correct)
- Standard of living
What is the percentage of workers searching for work called?
What is the percentage of workers searching for work called?
- Unemployment rate (correct)
- Gross domestic product (GDP)
- Consumer price index (CPI)
- Underemployment
Which of the following is a type of unemployment that occurs when people change their jobs?
Which of the following is a type of unemployment that occurs when people change their jobs?
What is the formula for calculating Gross Domestic Product (GDP)?
What is the formula for calculating Gross Domestic Product (GDP)?
Which of the following is a type of inflation that is characterized by a general decline in prices for goods and services?
Which of the following is a type of inflation that is characterized by a general decline in prices for goods and services?
What is the measure used by economists to calculate the economy's inflation rate?
What is the measure used by economists to calculate the economy's inflation rate?
Which of the following is a type of unemployment that occurs when workers' skills do not match the jobs available?
Which of the following is a type of unemployment that occurs when workers' skills do not match the jobs available?
What is the term used to describe the underuse of a worker because the job does not utilize their skills, is part-time, or leaves them idle?
What is the term used to describe the underuse of a worker because the job does not utilize their skills, is part-time, or leaves them idle?
What is the term used to describe the material well-being of the average person in a given population?
What is the term used to describe the material well-being of the average person in a given population?
What is the term used to describe the economic situation defined by an inefficient distribution of goods and services in the free market?
What is the term used to describe the economic situation defined by an inefficient distribution of goods and services in the free market?
What is the term used to describe a cost that spills over to a third party in an economic transaction?
What is the term used to describe a cost that spills over to a third party in an economic transaction?
What is the term used to describe a benefit that spills over to a third party in an economic transaction?
What is the term used to describe a benefit that spills over to a third party in an economic transaction?
Which of the following is a tool used by the Federal Reserve for monetary policy?
Which of the following is a tool used by the Federal Reserve for monetary policy?
What is the purpose of the discount rate set by the Federal Reserve?
What is the purpose of the discount rate set by the Federal Reserve?
What is the reserve ratio?
What is the reserve ratio?
Which of the following is a tool used for fiscal policy?
Which of the following is a tool used for fiscal policy?
What is the goal of supply-side economics?
What is the goal of supply-side economics?
What is the goal of demand-side economics?
What is the goal of demand-side economics?
What is fractional reserve banking?
What is fractional reserve banking?
What is globalization?
What is globalization?
What is GATT?
What is GATT?
What is the purpose of international trade?
What is the purpose of international trade?
Which of the following is a trade barrier that seeks to limit all trade from a nation?
Which of the following is a trade barrier that seeks to limit all trade from a nation?
What is the purpose of the World Trade Organization (WTO)?
What is the purpose of the World Trade Organization (WTO)?
Which of the following refers to goods a country buys from another country?
Which of the following refers to goods a country buys from another country?
What is the term used to describe a situation where a country's exports are higher than its imports?
What is the term used to describe a situation where a country's exports are higher than its imports?
What is the theory or practice of shielding a country's domestic industries from foreign competition by taxing imports?
What is the theory or practice of shielding a country's domestic industries from foreign competition by taxing imports?
Which action does the Federal Reserve commonly take to enact a tight-money policy?
Which action does the Federal Reserve commonly take to enact a tight-money policy?
How does selling bonds on the open market affect bond prices and interest rates?
How does selling bonds on the open market affect bond prices and interest rates?
What is the effect of higher interest rates on lending?
What is the effect of higher interest rates on lending?
How does less lending affect aggregate demand?
How does less lending affect aggregate demand?
What is the effect of decreased aggregate demand on GDP growth?
What is the effect of decreased aggregate demand on GDP growth?
What is the effect of decreased aggregate demand on the general price level?
What is the effect of decreased aggregate demand on the general price level?
What is the Fed's most common action to enact a tight-money policy?
What is the Fed's most common action to enact a tight-money policy?
What is the potential consequence of contracting the money supply too much?
What is the potential consequence of contracting the money supply too much?
What does the Fed aim to decrease by enacting a tight-money policy?
What does the Fed aim to decrease by enacting a tight-money policy?
What is the potential consequence of decreasing reserves available for loans?
What is the potential consequence of decreasing reserves available for loans?
Which states have no individual income tax?
Which states have no individual income tax?
What is the range of corporate income tax rates among states?
What is the range of corporate income tax rates among states?
Which types of taxes do most states levy?
Which types of taxes do most states levy?
What is a balanced budget?
What is a balanced budget?
Which budget covers day-to-day expenses?
Which budget covers day-to-day expenses?
Which budget is not subject to balanced budget requirements?
Which budget is not subject to balanced budget requirements?
Which expenses do capital budgets fund?
Which expenses do capital budgets fund?
Which states are required to have a balanced budget?
Which states are required to have a balanced budget?
Which states have no individual or corporate income taxes?
Which states have no individual or corporate income taxes?
Which types of taxes do states levy on businesses and professionals?
Which types of taxes do states levy on businesses and professionals?
Which of the following is NOT a requirement to be included in the GDP?
Which of the following is NOT a requirement to be included in the GDP?
Which of the following sectors is NOT included in the calculation of GDP?
Which of the following sectors is NOT included in the calculation of GDP?
Which letter is used to represent net exports in the GDP equation?
Which letter is used to represent net exports in the GDP equation?
Which one of these is the most accurate description of nominal GDP?
Which one of these is the most accurate description of nominal GDP?
Which one of these is the most accurate description of real GDP?
Which one of these is the most accurate description of real GDP?
What is the purpose of comparing nominal GDP to a base year when calculating real GDP?
What is the purpose of comparing nominal GDP to a base year when calculating real GDP?
Which phase of the business cycle is characterized by a prolonged economic contraction lasting two or more quarters (six months or more)?
Which phase of the business cycle is characterized by a prolonged economic contraction lasting two or more quarters (six months or more)?
What is the term used to describe an extended period of high unemployment and reduced business activity?
What is the term used to describe an extended period of high unemployment and reduced business activity?
What is the term used to describe periods during which prices rise at the same time there is a slowdown in business activity; a stagnation of business activity and inflation of prices?
What is the term used to describe periods during which prices rise at the same time there is a slowdown in business activity; a stagnation of business activity and inflation of prices?
What is the final phase of the business cycle, characterized by the point at which real GDP and employment stop declining?
What is the final phase of the business cycle, characterized by the point at which real GDP and employment stop declining?
Which type of unemployment occurs when workers' skills do not match the jobs that are available?
Which type of unemployment occurs when workers' skills do not match the jobs that are available?
Based on the text, which type of unemployment occurs when industries slow or shut down for a season or make seasonal shifts in their production schedules?
Based on the text, which type of unemployment occurs when industries slow or shut down for a season or make seasonal shifts in their production schedules?
What is the normal unemployment rate in an economy that is working properly?
What is the normal unemployment rate in an economy that is working properly?
What is the definition of full employment according to the text?
What is the definition of full employment according to the text?
What is the definition of the unemployment rate according to the text?
What is the definition of the unemployment rate according to the text?
What causes inflation according to the quantity theory?
What causes inflation according to the quantity theory?
Which of the following is a major cause of poverty?
Which of the following is a major cause of poverty?
What is the poverty threshold for a household of 4 in 2019?
What is the poverty threshold for a household of 4 in 2019?
Which theory attributes inflation to too much money in the economy?
Which theory attributes inflation to too much money in the economy?
Which government program provides block grants to states for implementing their own assistance programs?
Which government program provides block grants to states for implementing their own assistance programs?
According to Keynesian economics, what can the government do during a recession to stimulate the economy?
According to Keynesian economics, what can the government do during a recession to stimulate the economy?
What is the multiplier effect in fiscal policy?
What is the multiplier effect in fiscal policy?
What is an automatic stabilizer in fiscal policy?
What is an automatic stabilizer in fiscal policy?
What is the national debt?
What is the national debt?
According to the text, what is the crowding-out effect?
According to the text, what is the crowding-out effect?
Which of the following accurately describes fiscal policy?
Which of the following accurately describes fiscal policy?
Which of the following is an example of an expansionary fiscal policy?
Which of the following is an example of an expansionary fiscal policy?
Which of the following is an example of a contractionary fiscal policy?
Which of the following is an example of a contractionary fiscal policy?
What is the purpose of a federal budget?
What is the purpose of a federal budget?
Which of the following accurately describes the budget process?
Which of the following accurately describes the budget process?
Which of the following is a more comprehensive measure of trade because it includes not just goods and services but also money spent, travel, and investments?
Which of the following is a more comprehensive measure of trade because it includes not just goods and services but also money spent, travel, and investments?
What determines how much you will spend on a coat in Canada if the price is $300 CAD and the exchange rate is 0.7437 USD/CAD?
What determines how much you will spend on a coat in Canada if the price is $300 CAD and the exchange rate is 0.7437 USD/CAD?
Which publication publishes daily exchange rates?
Which publication publishes daily exchange rates?
What is the term used to describe a situation where a country's exports are higher than its imports?
What is the term used to describe a situation where a country's exports are higher than its imports?
What is the potential consequence of contracting the money supply too much?
What is the potential consequence of contracting the money supply too much?
What is the term used to describe the total amount of money owed by a country's government?
What is the term used to describe the total amount of money owed by a country's government?
What action does the Federal Reserve commonly take to enact a tight-money policy?
What action does the Federal Reserve commonly take to enact a tight-money policy?
What is GATT?
What is GATT?
What is the theory or practice of shielding a country's domestic industries from foreign competition by taxing imports?
What is the theory or practice of shielding a country's domestic industries from foreign competition by taxing imports?
Which budget covers day-to-day expenses?
Which budget covers day-to-day expenses?
Flashcards are hidden until you start studying
Study Notes
Types of Inflation
- Hyperinflation is defined as price increases of 50% or more per month.
- Deflation refers to a general decline in prices for goods and services.
Unemployment Concepts
- Frictional unemployment occurs when individuals change jobs.
- Structural unemployment arises when workers' skills do not match available jobs.
- Underemployment describes workers who are not fully utilized in their current roles.
Economic Indicators
- The percentage of workers searching for work is referred to as the unemployment rate.
- The material well-being of the average person in a population is called standard of living.
- Inefficient distribution of goods and services in the free market is termed market inefficiency.
Economic Costs and Benefits
- Externalities are costs that spill over to a third party in an economic transaction.
- Positive externalities result in benefits that spill over to a third party.
Monetary and Fiscal Policy Tools
- Tools used by the Federal Reserve include setting the discount rate and reserve ratios.
- Fiscal policy tools are government spending and taxation.
Economic Theories
- Supply-side economics aims to stimulate production by lowering taxes and decreasing regulation.
- Demand-side economics focuses on increasing consumers' demand as a means to boost economic activity.
Banking and Financial Concepts
- Fractional reserve banking allows banks to keep only a portion of deposits in reserve while lending out the rest.
- When the Federal Reserve sells bonds, bond prices decrease, leading to higher interest rates.
Trade and Globalization
- Globalization refers to the process of increased interconnectedness among countries.
- GATT (General Agreement on Tariffs and Trade) was an international treaty aimed at reducing trade barriers.
Trade Dynamics
- Imports are goods a country purchases from another nation.
- A trade surplus occurs when a country's exports exceed its imports.
- Protectionism is the practice of shielding domestic industries from foreign competition through tariffs.
Economic Conditions
- A prolonged economic contraction lasting two or more quarters is termed a recession.
- Stagflation occurs when inflation rises simultaneously with a slowdown in economic activity.
GDP Measurements
- Gross Domestic Product (GDP) measures the total economic output of a country.
- Net exports in the GDP equation are represented by the letter X.
- Nominal GDP measures economic output without adjusting for inflation, while real GDP accounts for it.
Employment and Economic Health
- Full employment refers to an economy's optimal employment level, where only frictional and structural unemployment exist.
- The normal unemployment rate in a well-functioning economy typically ranges around 4-5%.
Causes and Measurements of Poverty
- Major causes of poverty include lack of education, job opportunities, and economic inequality.
- The poverty threshold for a household of four in 2019 was approximately $25,750.
Fiscal Policy Mechanisms
- Fiscal policy can be expansionary (increasing government spending) to stimulate the economy, or contractionary (decreasing spending) to cool it down.
- Automatic stabilizers, like unemployment insurance, help counteract economic fluctuations without direct intervention.
Banking and Economic Terms
- The national debt is the total amount of money owed by a government.
- Crowding-out occurs when government borrowing reduces private sector investment.
Budget Types
- The federal budget outlines government expenditures and revenue projections.
- Operating budgets cover day-to-day expenses, while capital budgets fund long-term investments and infrastructure.
Exchange Rate Considerations
- The exchange rate determines the cost of foreign goods and services in domestic currency.
- Daily exchange rates are published by financial publications and central banks.
Economic Stability
- Contraction of the money supply can lead to recession and reduced economic activity.
- A balanced budget occurs when expenditures equal revenues, preventing deficits.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
