Test Answers on Macroeconomics Flashcards

absolute advantage the ability to produce something more efficiently capital productive equipment or machinery comparative advantage the ability to produce something with a lower opportunity cost economics a social science that studies how resources are used and is often concerned with how resources can be used to their fullest potential efficiency using resources to their […]

Economics The social science that deals with the analysis of material problems and how societies allocate scarce resources to satisfy human wants Macroeconomics The study of aggregated economic activity such as the forces that determine the level of income and employment in a society Microeconomics the study of disaggregated economic activities, or how a market […]

Business Cycle alternate periods of economic expansion and economic recession, fluctuations in economic activity, such as employment and production Recession an economic slump; a depression; a decline Real GDP or Real Gross Domestic Product a measure of GDP in which the quantities produced are valued at the prices in a base year rather than at […]

business cycle Recurring increases and decreases (fluctuations) in the level of in economic activity over periods of years; consists of peak, recession, trough, and expansion phases. (such as employment and production) economics the study of how society manages its scarce resources efficiency the property of society getting the most it can from its scarce resources […]

Natural Resources the lands, water, metals, minerals, animals and other gifts of nature that are available for producing goods and services. Scarcity the perpetual state of insufficiency of resources to satisfy people’s unlimited wants. Economics the study of how people work together to transform resources into goods and services to satisfy their most pressing wants, […]

The Business Cycle Gives us insight on our economy Economic Boom 5% or greater increase Economic Bust When the economy shrinks by 5% Law of demand Quantity of a good demanded at a given time period increases as its price fall Classical economic school of thought Adam Smith- “Wealth of Nations” –economy affects life Classical […]

Economy How society manages it’s scarce resources – or all it’s resources Scarcity The limited nature of society’s resources Efficiency The property of society getting the most it can from its scarce resources Equality The property of distributing economic prosperity uniformly among the members of society Opportunity cost Whatever must be given up to obtain […]

Microeconomics vs. Macroeconomics Micro deals with the interactions and decisions of individual households as well as firms. Macro deals with the economy as a whole. What is GDP? The market value of all final goods and services produced within a country in a given period of time. What are the factors of GDP? Consumer spending, […]

Economics the study of how people, institutions, and society make economic choices under conditions of scarcity. Macroeconomics the parts of economics concerned with the economy as a whole; with such major aggregates as the household, business, and government sectors; and with measure of the total economy. Circular Flow Model the flow of resources from household […]

lower RRR decrease interest rates, decrease unemployment, increase RGDP, increase price levels raise RRR increase interest rates, increase unemployment, decrease RGDP, decrease price levels deduction an amount that can deducted from taxable income S&P 500 500 companies on the NYSE DOW composite index of 30 of largest companies stagflation increase AD, increase price levels, increase […]

Scarcity the limited nature of society’s resources Economics the study of how society manages its scarce resources Efficiency the property of society getting the most it can from its scarce resources Equality the property of distributing economic prosperity uniformly among members of society Opportunity Cost whatever must be given up to obtain some item Rational […]

What is opportunity cost? what you give up in order to get something else A college cost $20,000 per year. The job you give up to go to college pays $30,000 a year. What is the opportunity cost of going to college? $50,000 Demand has a negative slope true A price change would do what […]

The aim of study of macroeconomics is to examine the economy’s behavior. Which best describes why a government’s actions are important within macroeconomics Government can use policy to influence the economy. This is a graph showing price and total output in the short and long run. According to this graph, how does supply behave in […]

aggregate demand curve a curve depicting the relationship between real GDP demanded (i.e., expenditures) and the price level in the economy; the aggregate demand curve slopes downward from left to right. aggregate supply curve a curve defining the relationship between real production and price level. business cycles fluctuations in real GDP around the trend value; […]

Microeconomics Study of how individuals choose to allocate the scarce resources available to them. Macroeconomics The study of how groups of individuals choose to allocate the scarce resources available to them. Aggregate “Total” Scarcity Lack of enough resources to satisfy all desired uses of those resources. Opportunity Cost The value to you of the next […]

Which best describes what occurs in the product market? the exchange of goods and services for money Macroeconomic equilibrium occurs when aggregate supply and aggregate demand meet. What does this indicate about society? Society’s supply and demand have stagnated. In microeconomics, what occurs when equilibrium is reached? c This is a graph showing price and […]

Investment spending in macroeconomics refers to: adding to physical capital. National savings is the sum of private savings and: the budget balance. One difference between a closed and an open economy is that: in the latter, foreign savings complement domestic savings in financing investment spending. (Table: Investment Spending, Private Spending, and Capital Inflows) Look at […]

What is economics? the study of how people use their scarce resources to satisfy their unlimited wants What is Land and what is the payment for it? Land is also known as natural resources, and the payment is either rent or gift of nature What is Labor and it’s payment? the physical and mental effort […]

Scarcity Limited resources and unlimited wants. Economics Study of how society manages its scarce resources. Efficiency The property of society getting the most from its scarce resources. Equity The property of distributing output fairly amonf society’s members. Opportunity Cost Whatever is given up to get something else. Marginal Changes Incremental adjustments to an existing plan. […]

Which best describes what injector factors bring to an economic system? money This is a graph showing price and total output in the short and long run. According to this graph, how does supply behave in the short run and long run? Output reacts differently. In microeconomics, what occurs when equilibrium is reached? Prices are […]

GDP = C + I + G + Xn The expenditure approach to measuring GD correlates well with aggregate demand (AD) GDP = W + I + R + P The income approach to measuring GDP correlates well with aggregate supply Calculating Nominal GDP The quantity of various goods produced in a nation times their […]