Podcast
Questions and Answers
What are the potential unintended outcomes of fiscal policies?
What are the potential unintended outcomes of fiscal policies?
- Crowding out may occur, affecting private sector investment. (correct)
- Inflation may decrease as government spending increases.
- Increased taxes can lead to a decrease in consumer spending. (correct)
- Government intervention always improves economic stability.
Which of the following best describes the relationship between nominal and real variables in economics?
Which of the following best describes the relationship between nominal and real variables in economics?
- Nominal variables are unadjusted measures while real variables account for inflation's effect. (correct)
- Real variables only apply to production rates.
- Nominal variables adjust for inflation, while real variables do not.
- Real variables are always greater than nominal variables.
Which factor is typically NOT included in the determination of GDP?
Which factor is typically NOT included in the determination of GDP?
- Net exports, calculated as exports minus imports.
- Household transactions without formal market exchange. (correct)
- Government spending on public goods.
- Business investment in physical capital.
What effect does a tariff have on a country's domestic market?
What effect does a tariff have on a country's domestic market?
What is a significant characteristic of the Phillips Curve?
What is a significant characteristic of the Phillips Curve?
Flashcards
Transfer Payments
Transfer Payments
Payments made by the government to individuals for which no goods or services are exchanged in return, like social security and unemployment benefits.
Factors of Production
Factors of Production
The resources used in the production of goods and services. These include land, labor, capital, and entrepreneurship.
AD/AS Graph
AD/AS Graph
A graphical representation showing the relationship between the price level (on the y-axis) and the quantity of real GDP (on the x-axis). It shows how the economy's aggregate supply and aggregate demand interact to determine the equilibrium level of output and prices.
Inflation
Inflation
The sustained increase in the general price level of goods and services in an economy over a period of time.
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Deflation
Deflation
The decrease in the general price level of goods and services in an economy over a period of time.
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Macroeconomics Semester Exam Study Guide
- Concepts: Transfer Payments, Factors of Production (all kinds), Supply/Demand issues, Borrowers benefit/Lenders lose, Properly labeled AD/AS Graph
- Economic Indicators: Inflation, Deflation, Disinflation, Balance of Payments, Xn (Net Exports), Terms of Trade, Tariffs, Supply-Side Policy Measures, Nationalization, Exchange Rate Appreciation/Depreciation, Frictional/Structural/Cyclical Unemployment (including/excluding aspects)
- Economic Policies: Fiscal/Monetary Policies (intentions, means, intended/unintended outcomes), Short-Run & Long-Run Phillips Curve, PPC (synonymous with LRAS) - principles, Business Cycles (Phases, Points, Causes for Change), Nominal vs. Real Variables, Cost-Push/Demand-Pull Inflation, Crowding Out (intentions/drawbacks)
- Economic Formulas: MPS/MPC and Tax Formulas, Formula and Purpose of the CPI, Shifters of AD/AS/PPC
- GDP and Output: What is and is not included in GDP, What each graph measures (e.g., Phillips Curve, AD/AS Model), Real Wages vs. Productivity, Standard of Living, Reasons for Demand Downward/Supply Upward Trends, Equilibrium, Contrary Fiscal/Monetary Policies, Reasons for Productivity Increases/Decreases, Wage/Price Spiral
- Output Expenditures Model: C+I+G+(X-M) = GDP
- Monetary Policy: OMO (Open Market Operations) - what it is, how it works, what it includes
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