ECO 201

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ECO 201
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2010-11-27 16:48:43
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FINAL
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  1. -Econmoics can be described as the study-limited; unlimited

    -a friend want to learn how-macro

    -Micro is - how individuals

    -Normative econ- a state of "what should be"

    -"if A occurs then B will follow"-positive statement

    -
    "No indiv. shoud have less than $20,000" ex- notmative


    Ch. 1
  2. -Scarcity implies- make choices

    -All of the following ex physical cap except- company stocks and bonds

    -Factors of production- I, II, III, IV

    -value of best altern. sacr- opportunity cost

    -one oppor. cost college- giving up employ possib.

    -Bill Bonecrusher- 50,000; 2 mill

    -suppose you have 4 choices- the value of the sctivity that you would have selected
    Ch. 2
  3. -law of demand states- QD will vary inversely

    -demand curve- slopes down

    -example of law of demand- an increase in the price of gasoline

    -suppose the short skirts- a leftward shift in the DC

    -increase in demand is shown graphically- a shift of the demand curve to the right

    -Sarah gets a salary- hamburger is an inferior good and steak is normal

    - in the figure above, when the price B good increases- the movement along D0 from P1 to P2
    Ch. 2
  4. -which terms describe few or too many resources- a market failure

    -a situation benfits or a cost associated- an externality

    -when market failures occur- the price system will

    -An ex. of 3rd parties in the market of auto- a pedestrian

    -a negative externality such as pollution- a tx on producers

    -a government subsidy is typically used- to provide a govnt-inhibited good

    -in the US, which of the following is ex of- cigarettes
    Ch. 5
  5. -true about unemployment- all of the above

    -is true about the labor force-both a and b are correct

    -which ppl woudl be considered unemployed- Edna, who lost her job as a teacher

    -individuals who have stopped looking for work- discouraged workers

    -suppose that Matt quits a job- counted as frictionally unemployed

    -If a person loses her job cuz her ablit- structurally unemployed

    -a lifeguard- seasonally unemployed
    Ch. 7
  6. -full employment is not zero- there is "normal"

    - unemployment resulting from business recession- cyclical

    -a person graduates from college- frictional

    -the rate of inflation and purchasing power- inversely

    -the nominal value of a good- the price of the good in today's dollars

    -when econ discuss the nominal value of an econ.- expressed in current dollars

    -suppose that in 2006, nominal GDP- 5 Trillion
    Ch. 7 & 8
  7. -total market value of final g&s- Gross Domestic Product

    -2 principle methods of measuring GDP- expenditures approach & the income approach

    -included in deter. GDP- the purchase of a new car

    -goods that are used up entirely in the production- intermediate goods

    -included in GDP- none of the above

    -goods that are used up entirely- intermediate goods

    -which included in calculating GDP- none of the above

    - wheat used for producing bread- an intermediate

    -suppose that the economy of Springfield- 7,100
    ch. 8
  8. -longrun aggregate supply reflects- total production in the economy

    -long-run aggregated supply curve-vertical at the full-employment level of RGDP

    -as the capital stock grows & tech- shift right

    -longrun aggregate supply surve will shift to the left- population

    -woudl cause increase in AD- a decrease in price level

    -AD reflects-??? not d

    -the ADC is usually- downward sloping
    Ch. 10
  9. -the idea that supply creates its own demand is known- Shays Law

    -if you become elated when you recieve a 20%- money illusion

    -if a shift in AD only affects RGDP- horizontal

    -in the above figure, assume current AD is represented by AD2- the new equilibrium RGDP will be x

    -a key component of the Keynesian model- proces are sticky

    -according to the above figure, an increase in AD between RGDP y0 to Y1- would most likely result in some inflation

    -according to the above figure, an increase in AD beyond RGDP level Y1- a higher price level but no change in RGDP

    ch 11.
  10. -which would NOT be considered a consumption good- shears that cut meat

    -saving and savings- savings is a stock and savings is a flow

    -the expression 1/mps- multiplier

    -suppose the MPC is .75- 750,000

    -the larger is the MPC- the larger is the multiplier

    -if the MPC is 0.9, the multiplier- 10

    -suppose that when disposable income increases by 1,000- .75

    -dissaving- disposable income is less than consumption.
    ch. 12
  11. -which one is NOT a part of M1- savings accounts

    -which is true about M2- it is larger than M1

    -a business owner applies for a bank loan- moral hazard

    -the liklihood that individuals who seek to borrow money- adverse selection

    -a system in which depository institutions hold reserves- fractional reserve banking

    -in the US, where do depository- Either as vault cash

    -a bank with 200 mil in transaction- 30 million

    -a depository institution has 2 million in transaction deposits- 200,000

    -if a bank holds 20,000 in required reserves- 50,000

    -a bank with 500 million- 15% ; 10%

    -suppose a nank is exactly meeting ists required reserve ratio of 10%- 67,500

    -total reserves- required reserves + excess reserves

    -the required reserve ration 10%. the bank has 500,000- 50,000

    -based on the above table-10%

    -the potential money muliptler for tble above- 10
    ch. 15 & 16
  12. -to close a recessionary gap- increase the money supply

    -a recessionary gap currently exists- buy govnt securities

    -the Federal Open Market Committee- selling bonds

    -the real world, contractionary monetary- reduce the rate of inflation

    -what the dollar appreciates- foreign residents demand more of out goods, and us residents desire to purchase more foreign goods.

    -a depreciation of the dollar- makes us less exports in terms of foreign currency and imports more expensive

    according to the equation of exchange- V is 4
    ch. 17

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