Economics Concepts Quiz

<p>CA debit (under imports) and a KFA credit (B)</p> Signup and view all the answers

<p>432 Forint/Euro (D)</p> Signup and view all the answers

<p>The EGP will depreciate by 20%, from E = 30 to E' = 36 EGP per Dollar (B)</p> Signup and view all the answers

<p>We ought to take public transportation more often. (B), All restaurants should sell healthy-choice meals. (C)</p> Signup and view all the answers

<p>Joe in chocolate bananas, Jill in chocolate strawberries. (C)</p> Signup and view all the answers

<p>P=30; Q=40 (B)</p> Signup and view all the answers

<p>A movement up and to the left along the demand curve. (C)</p> Signup and view all the answers

<p>Statement i is normative; Statement ii is positive. (A)</p> Signup and view all the answers

<p>Different producers have different opportunity costs for each product. (D)</p> Signup and view all the answers

<p>There is a price floor at a level higher than the equilibrium price. (B)</p> Signup and view all the answers

<p>Vegetables bought by a restaurant. (C)</p> Signup and view all the answers

<p>$70 (C)</p> Signup and view all the answers

<p>The baker’s contribution to GDP is an added value of $36. (A)</p> Signup and view all the answers

<p>Real GDP per capita grows at 2% per year. (A)</p> Signup and view all the answers

<p>Population growth halts income per capita increases. (A)</p> Signup and view all the answers

<p>It includes all working-age individuals. (B)</p> Signup and view all the answers

<p>215 (B)</p> Signup and view all the answers

<p>20% (A)</p> Signup and view all the answers

<p>The amount of labor increases while real wages may increase or decrease. (D)</p> Signup and view all the answers

<p>Increased expected future income and fiscal policy increases government expenditure. (A)</p> Signup and view all the answers

<p>It increases short-run aggregate supply as firms face higher costs. (A)</p> Signup and view all the answers

<p>Fluctuations in productivity from technological advancements. (A)</p> Signup and view all the answers

<p>A recessionary deficit is created. (B)</p> Signup and view all the answers

<p>Price stability and maximum employment. (A)</p> Signup and view all the answers

Normative statements express value judgments or opinions about how things should be. Positive statements describe facts or how the world is.

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

The ability of a producer to produce a good or service at a lower opportunity cost than another producer.

The price and quantity where the supply and demand curves intersect; market-clearing price.

A graph showing the relationship between price and quantity demanded for a good or service.

A change in the quantity demanded, resulting from a price change, is a movement along the demand curve. A change in demand, resulting from non-price factors, causes a shift of the entire demand curve.

The interaction of the supply and demand curves determines the equilibrium price and quantity in a market.

The different combinations of goods or services that can be produced given available resources and technology.

The total amount of currency in circulation plus commercial banks' reserves at the central bank. It is the base on which the money supply is built.

The total amount of money available in an economy for transactions, including currency, demand deposits, and other liquid assets.

The ratio of the money supply to the monetary base. It shows how much the money supply expands for each dollar increase in the monetary base.

A record of all economic transactions between residents of a country and residents of the rest of the world.

Part of the balance of payments that records the flow of goods, services, investment income, and unilateral transfers.

Part of the balance of payments that records transactions related to financial assets and liabilities.

A theory that predicts that the expected exchange rate change between two currencies should offset the interest rate differential between them.

A theory that states that the exchange rate between two currencies should adjust to equalize the prices of a basket of goods in both countries.

The likelihood of selling goods at a profit in an illegal market is higher when there's a price ceiling set below the equilibrium price.

An intermediate good is a good used in the production of another good. For example, vegetables bought by a restaurant to make meals are intermediate goods.

GDP (Gross Domestic Product) is the total value of all final goods and services produced within a country's borders in a given period. In the given example, GDP is $78.

GDP consists of consumption, investment, government spending, and net exports. In this example, consumption is $74.

Nominal GDP is the value of goods and services at current prices. Real GDP accounts for inflation, showing the value of production using constant prices.

Real GDP per capita growth shows economic progress per person. It's calculated by subtracting the inflation rate and population growth from the nominal GDP growth rate.

The Malthusian Trap argues that in pre-industrial societies, gains in living standards are temporary. They lead to population growth, which lowers income per capita back to subsistence levels.

The labor force includes all those who are employed or actively seeking employment.

Nominal GDP is the total value of goods and services using current year prices. In this example, nominal GDP for year 2000 is $150 and $215 for year 2001.

Inflation is the percentage change in the price level of a basket of goods and services from one year to the next. In this example, the inflation rate in 2001 was 20% ((215 - 150)/150 * 100).

An increase in the supply of labor due to population growth and an increase in the capital stock will increase the amount of labor and likely increase the real wage.

Aggregate demand increases if expected future income, inflation, or profits increase. It also increases if fiscal policy increases government expenditure.

A rise in the money wage rate does not change the short-run aggregate supply curve because along this curve, relative prices remain constant.

Real Business Cycle theory explains economic fluctuations by changes in productivity, driven by technological advancements. It argues that fluctuations in the pace of technological change cause fluctuations in the business cycle.

A cyclical deficit occurs during a recessionary gap. It's a result of lower tax revenues and increased spending.

The Federal Reserve's primary objective is to achieve price stability (keeping inflation close to 2%) and maximum employment.