Macro Exam 1

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  1. Scarcity can best be defined as...
    Insufficient resources to satisfy unlimited wants.
  2. The respective payments for the resources of land, labor, capital and entrepreneurship are
    Rent, wages, interest, and profit
  3. Theory in economics
    Involves some simplification of reality
  4. The opportunity cost of an activity is
    The value of the best alternative not chosen
  5. Barter is
    the direct exchange of goods, without the use of money
  6. If all resources are used efficiently to produce goods and services, a nation will find itself producing..
    somewhere on its production possibilities frontier
  7. The law of increasing opportunity cost explains why...
    the production possibilities frontier is curved
  8. An outward shift in the production possibilities frontier..
    reflects economic growth
  9. The law of demand states that
    price and quantity demanded are inversely related
  10. If demand for personal computers increases as a result of an increase in income,
    personal computers must be a normal good
  11. If good B is a complement to good A, then a rise in the price of B...
    decreases the demand for A
  12. An improvement in technology would shift...
    the supply curve outward
  13. When quantity demanded of a good is less than the quantity supplied at the prevailing market price,
    the price of the good tends to fall
  14. A decrease in the supply of chocolate chips would usually result in a
    higher equilibrium price and a lower equilibrium quantity
  15. Suppose demand increases and supply increases. Which of the following must happen?
    Equilibrium quantity increases
  16. Suppose a market is in equilibrium and then a price ceikiling is established below the equilibrium price. Which of the following will happen?
    A shortage will develop
  17. Productivity growth is important because
    it ultimately increases a nation's standard of living
  18. Expenditures of which of the following are not included in the consumption component of GDP?
    Purchase of a new home
  19. Investment spending in GDP measurement includes
    changes in business inventories
  20. Net exports is the value of
    exports minus the value of imports
  21. Which of the following is the largest component of GDP
    Consumption (C)
  22. Real GDP is the same thing as
    constant-dollar DP
  23. People who are not currently employed, but say they wanted a job, are counted as unemployed only if they
    are actively seeking employment
  24. A discouraged worker is one who...
    drops out of the labor force because he cannot find a job.
  25. A person who repairs typrwriters becomes unemployed because people buy personal computers instead of having their typewriters repaired. This person can best be described as
    structurally unemployed
  26. Cyclical unemployment results from
    a recession in the economy
  27. If the inflation rate is higher than expected, which of the following groups in society would be most likely to gain?
  28. Deflation refers to
    a decreasing price level
  29. The difference demand-pull inflation and cost-push inflation is that
    demand-pull inflation is caused by movements of the aggregate demand curve; cost-push inflation is caused by movements of the aggregate supply curve
  30. Suppose you received a 5% increase in your nominal wage. Over the year, inflation ran about 2 percent. Which of the following is true?
    Both your nominal and real wages increased
  31. The consumer price index measures changes in
    the total cost of a specific market basket of consumer goods and services
  32. The real rate of interest can be expressed as the
    nominal interest rate minus the inflation rate
  33. Classical economists argue that "all savings will be invested" due to the influence of:
    interest rates
  34. The classical concept that "supply creates its own demand" is known as
    Says Law
  35. Captial
    Factor of production that has been produced for use in the production of other goods and services
  36. National Income
    The total amount of money earned within a country
  37. Depreciation
    A measure of the amount of capital that wears out or becomes obsolete during a period.
  38. Ceteris Paribus
    Latin phrase meaning all other things held constant
  39. Frictional Unemployment
    When a person chooses to leave a business or is only unemployed for a short period of time.
  40. Disinflation
    Reduction in the rate of inflation
  41. Rent
    The economic return for land
Card Set:
Macro Exam 1
2015-12-12 20:26:09
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