Economics Unit 4 Test Answers – Flashcards
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(Chapter 13) To determine Gross National Product
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add to GDP all payments received by Americans outside the US and subtract payments made to foreign-owned resources in the US
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(Chapter 13) An index that reports on price changes for about 90,000 goods and services is the
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consumer price index
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(Chapter 13) The census is taken every
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ten years
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(Chapter 13) Baby boomer are those people born between
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1946 and 1964
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(Chapter 13) Economic growth benefits the government by
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enlarging the tax base
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(Chapter 14) The business cycle since World War II has been characterized by
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extended expansions altering with brief recessions
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(Chapter 14) Unemployment that is directly related to swings in the business cycle is
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cyclical unemployment
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(Chapter 14) According to the cost-push theory, inflation is caused by
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workers
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(Chapter 14) The forty percent of the population with the lowest income controls
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less than 2 percent of the nation's welath
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(Chapter 14) This is a proposed market-based antipoverty program designed to encourage work and reduce administrative costs
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negative inflation
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(Chapter 15) The Federal Reserve
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is made up of 12 district banks and 25 branch banks
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(Chapter 15) Liabilities are
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debts and obligations
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(Chapter 15) A balance sheet shows all of the following EXCEPT
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banks assets on the right of T account
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(Chapter 15) In the short run, an increase in the money supply results in
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lower interest rates
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(Chapter 15) Unlike many politicians, the Fed
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is concerned about the long-run health of the economy
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(Chapter 16) A comprehensive measure of consumer discomfort during a period of rising inflation and high unemployment is the
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misery index
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(Chapter 16) Aggregate demand will increase
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if consumers save less and spend more
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(Chapter 16) According to John Maynard Keynes's theory of the multiplier-accelerator effect, a decline in investment spending will
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lead to a downward spiral of the economy
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(Chapter 16) Unlike demand-side economics, supply-side economics
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advocates reduced government involvement in business
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(Chapter 16) The nation's monetary policy
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often comes under attack from politicians
