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Macroeconomics > Homework > Flashcards

Homework Flashcards

1
Q

A decision made on the margin is primarily a question of ____________________

A

how much?

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2
Q

The goals of equity and efficiency

A

tend to be in conflict with one another

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3
Q

Market failure

A

When economic interactions lead to inefficient outcomes

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4
Q

Marginal decisions are choices about __________________

A

Making incremental changes

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5
Q

The paradox of thrift suggests

A

When people save in anticipation of an economic downturn, they can worsen the downturn

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6
Q

Inflation may cause people

A

to stop using money and rely on bartering

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7
Q

According to Keynsian Economics, a depressed economy is caused by

A

inadequate spending

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8
Q

Movements in inflation are closely related to

A

Business cycle

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9
Q

Most widely used indicator of conditions in the labor market

A

unemployment rate

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10
Q

During recessions

A

unemployment increases

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11
Q

Trade deficit

A

value of imorts > value of exports

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12
Q

The idea that fiscal and monetary policies could be used to fight recessions was proposed by ________________________

A

John Maynard Keynes

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13
Q

In long run, overall level of prices is determined by:

A

Changes in money supply

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14
Q

Long run economic growth

A

Has important implications for policy concerns

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15
Q

Fiscal policy involves

A

Changes intaxation and government spending

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16
Q

Concept of business cycle

A

crucial role in developing macroeconomics

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17
Q

Government agency that calculates CPI

A

Bureau of Labor and Statistics

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18
Q

Overall level of well being

A

Tends to rise with GDP per capita

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19
Q

National income and product accounts keep track of

A

Consumer spending, business investment, government purchases

20
Q

U.S GDP in 2010

A

14.5 Billion

21
Q

If inflation rate has been constant, what is happening to overall price level

A

increasing at a constant rate

22
Q

Consumer spending is _____ percent of GDP

A

70

23
Q

Price index

A

Normalized measure of the overall price level

24
Q

Falling GDP associated with ______________

A

rising unemployment

25
Q

Natural rate of unemployment rises when

A

new entrants to labor force

26
Q

Unexpected deflation

A

Makes it harder for borrowers to repay their loans

27
Q

Actual unemployment =

A

cyclical + natural

28
Q

When unemployment rate is low

A

most is frictional

29
Q

real wage =

A

wage/price level

30
Q

efficiency wage

A

wage set above equilibrium level to motivate workers

31
Q

In 2010, ___ percent of unemployment people were considered long term unemployed

A

43

32
Q

Costs with changing a listing price

A

menu costs

33
Q

Unemployment rate based on a survey of ______________

A

60,000 families

34
Q

Research and development is paid for by

A

a combination of private and government funds

35
Q

Paul Romer described resarch and development as _____________________

A

the creation of improved instructions

36
Q

1948 - 2007, labor productivity rose by

A

2.3 percent per year

37
Q

Productivity depends on:

A

technology

human capital

Physical capital

38
Q

Natural resources are

A

less important in determing productivity than human and physical capital

39
Q

Real GDP per capita in 2010 was

A

7 times as it was in 1990

40
Q

Countries in which investment counts for large part of GDP

A

have a high domestic savings rate

41
Q

key statistic to track economic growth

A

real GDP per capita

42
Q

New growth theory suggests that technological change_____________________

A

responds to economic incentives

43
Q

growth accounting allows us to calculate

A

the effects of greater physical and human capital on economic growth

44
Q

Annual growth rate of per capita GDP

A

1.8 percent

45
Q

primary ingredient for long run economic growth

A

rising labor productivity

Macroeconomics (26 decks)

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