Economics Concepts and Decision-Making

<p>79 points on the Economics exam. (C)</p> Signup and view all the answers

<p>Both strategies yield a total score greater than 150 points combined. (D)</p> Signup and view all the answers

<p>17.6% (A)</p> Signup and view all the answers

<p>Japan (C)</p> Signup and view all the answers

<p>Japan, Germany, U.S. (B)</p> Signup and view all the answers

<p>3,649,493 million US$ (A)</p> Signup and view all the answers

<p>2.11 (C)</p> Signup and view all the answers

<p>$53,000 (A)</p> Signup and view all the answers

<p>$50,000 (B)</p> Signup and view all the answers

<p>$2,500 (C)</p> Signup and view all the answers

<p>$2,000 (B)</p> Signup and view all the answers

<p>Deposits (C)</p> Signup and view all the answers

<p>$6.50 (B)</p> Signup and view all the answers

<p>40% (A)</p> Signup and view all the answers

<p>17.9% (B)</p> Signup and view all the answers

<p>$28,800 (B)</p> Signup and view all the answers

<p>Year 3 (A)</p> Signup and view all the answers

<p>$2.50 (C)</p> Signup and view all the answers

<p>The price increased each year. (A)</p> Signup and view all the answers

<p>$4.00 (D)</p> Signup and view all the answers

<p>$79,200 (B)</p> Signup and view all the answers

<p>-- 2.2 % (B)</p> Signup and view all the answers

<p>$40 more and purchasing power increased by $33 (B)</p> Signup and view all the answers

<p>Decreases her effective interest earned (C)</p> Signup and view all the answers

<p>$50,000 (B)</p> Signup and view all the answers

<p>114 (B)</p> Signup and view all the answers

<p>$1,000 (C)</p> Signup and view all the answers

<p>5 percent (B)</p> Signup and view all the answers

<p>Decrease and the money supply eventually decreases. (C)</p> Signup and view all the answers

<p>8 units of goods; more dollars (B)</p> Signup and view all the answers

<p>$40; more dollars (D)</p> Signup and view all the answers

<p>2 (A)</p> Signup and view all the answers

<p>The money supply decreases eventually. (B)</p> Signup and view all the answers

<p>Increase proportionally to the price rise. (B)</p> Signup and view all the answers

<p>P increases. (A)</p> Signup and view all the answers

<p>It decreases the reserve ratio. (D)</p> Signup and view all the answers

Limited resources force choices among competing needs and wants.

The value of the next best alternative forgone when making a decision.

Giving up a 94 in economics for a 90 in statistics.

77

90

The percentage increase in the economy between year 2 and year 3.

A measure of economic output per person, adjusted for inflation (purchasing power), calculated for 2008 in US dollars, based on World Bank data.

The total value of the final goods and services produced in a country, adjusted for inflation.

The total value of the final goods and services produced in a country, not adjusted for inflation.

Ranking countries based on their real GDP per capita (highest to lowest) from information provided.

The amount of goods and services that can be purchased with a given amount of money.

A general increase in prices for goods and services over time.

A measure of the average change over time in the prices paid by urban consumers for a basket of consumer goods and services.

Income adjusted for inflation, reflecting the actual purchasing power of money.

Inflation decreases purchasing power because the same amount of money buys fewer goods and services.

Divide nominal income by the CPI and multiply by 100.

Divide the difference in real income by the original real income and multiply by 100.

The value of the best alternative foregone when making a decision.

The amount of reserves a bank holds beyond the required reserve ratio set by the central bank.

The percentage of a bank's deposits that the central bank mandates they must hold as reserves.

To find the excess reserves, subtract the required reserves from the total reserves held by the bank.

Given a 5% reserve requirement, the Bank of Pleasantville has $2,500 in excess reserves: $3,000 (Total Reserves) - $500 (5% of $10,000 deposits) = $2,500.

Banks can use their excess reserves to make more loans, which increases the money supply in the economy.

The rate at which the general price level of goods and services rises in an economy, measured as a percentage change over time.

The percentage increase in the general price level from Year 1 to Year 2, calculated as (Price in Year 2 - Price in Year 1) / (Price in Year 1) * 100.

The percentage increase in the general price level from Year 2 to Year 3, calculated as (Price in Year 3 - Price in Year 2) / (Price in Year 2) * 100.

The overall percentage change in price levels between Year 2 and Year 3, taking into account the inflation of individual years.

A measure of the average change over time in the prices paid by urban consumers for a basket of consumer goods and services.

The CPI is used to adjust nominal income (income in current dollars) for inflation to calculate real income (income adjusted for inflation).

If the CPI is higher in one location, a higher nominal income is needed to maintain the same real income as in a location with a lower CPI.

Art's real income in Des Moines, adjusted for the CPI, can be calculated using the formula: Real Income = (Nominal Income / CPI) * 100.

When people hold more cash and less deposits, banks have fewer reserves causing the money supply to decrease.

The purchasing power of your wage measured by how much you can buy with your salary.

Nominal wage is the amount of money you earn, while real wage is the amount of goods you can buy with your wage.

When prices rise, you need more money to buy the same amount of goods, making the real value of your wage decrease.

A fundamental equation in macroeconomics, relating money supply, velocity, price level, and real output.

If money supply (M) is 100, velocity (V) is 3, and output (Y) is 150, then the price level (P) is 2.

How quickly money moves through the economy, measured by the number of times a dollar changes hands in a given period.

Changes in the money supply, velocity, or output affect the price level. Increasing money supply or velocity increases the price level, while increasing output decreases it.