MyEconLab Quizzes & HW – Flashcards
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Which of the following events would shift the supply of smartphones to the right?
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A decrease in the price of inputs used to produce smart phones
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Economists refer to the necessity of holding all variables other than price constant in constructing a demand curve as the
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ceteris paribus condition
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The distinction between substitutes and complements is
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Substitute goods are used for the same purposes while complementary goods are used together
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Law of demand is the
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rule that, everything else constant, when the price of a good falls, the quantity demanded will increase and when the price of a good rises, the quantity demanded will decrease (inverse relationship)
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Change in demand is illustrated by movement from a spot on a demand curve
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To a spot on ANOTHER demand curve (demand curve shifts)
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Change in quantity demanded is illustrated by movement from a spot on a demand curve
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To another spot on that SAME demand curve
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Which of the following would NOT shift the demand curve for a good or service
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Change in the price of the good or service (that would change quantity demanded)
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What WOULD change/shift the demand curve?
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Changes in consumer income
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What do economists mean by market equilibrium
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A market outcome where quantity supplied = quantity demanded
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Market price is determined by
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Both supply and demand
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Factors that would make demand curve shift righ
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- Increase in income would shift to right for normal good
- Decrease in income would shift to right for inferior good
- Increase in price substitute goo would shift to right
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In years after the base year, NGDP is ______ RGDP
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greater than
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In the base year, NGDP is _____ real GDP
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equal to
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In years prior to the base year nominal GDP is _____ RGDP
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less than
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Growth rate for GDP
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(new/old) x 100
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GDP deflator
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(NGDP/RGDP) x 100
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Inflation from price deflator
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[(new deflator-old deflator)/old deflator] x 100
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NI =
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NI = GNP - depreciation - indirect business taxes
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Personal Income =
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PI = NI - corp. taxes - retained earning - ss +transfer payments
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PI = NI - corp. earning + transfer pmts
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How would the total # of people employed decrease, but the unemployment rate also decrease?
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It is possible if the labor force participation rate also falls
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What is NOT included in M1
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Funds in savings account, credit cards
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If you took a $20 bill to the treasury department or federal reserve bank, with what type of money would the government likely redeem it?
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With another Reserve Note of equal value
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Functions of money
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Medium of exchange
Unit of account
Store of value
Standard of deferred payment
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Medium of exchange
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$ is accepted as a form of payment in exchange of goods or services
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Unit of account
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$ allows a way of measuring value in a standard manner
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Store of value
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can be used to transfer our purchasing power from the present to the future (piggy bank)
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Effects of open market sales
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decreases money supply
