Econ Chp. 13-15 - Assignment Essays

question

Gross domestic product

answer

Total dollar value of all final goods and services produced in a nation in a single year.

question

Transfer payments

answer

Welfare and other supplementary payments, such as unemployment compensation, Social Security, and Medicaid that a state or the federal government makes to individuals.

question

Disposable personal income

answer

Income remaining for people to spend or save after all taxes have been paid.

question

Deflation

answer

Prolonged decline in the general price levels of goods and services.

question

Personal income

answer

Total income that individuals receive before personal taxes are paid.

question

Depression

answer

Major slowdown of economic activity during which millions of people are unemployed, many businesses fail, and the economy operated far below capacity.

question

Consumer price index (CPI)

answer

Measure of the change in price over time of a specific group of goods and services purchased by households. (Inflation)

question

National income

answer

Total income earned by everyone in the economy

question

Business cycle

answer

Irregular changes in the level of total output measured by real GDP.

question

Inflation

answer

Prolonged rise in the general price level of goods and services.

question

The producer price index measures

answer

Changes in the prices producers charge for the goods they sell.

question

Some economists have criticized the CPI because it

answer

Overestimates inflation.

question

The part of the business cycle in which the economy starts to slow down is called

answer

Contraction

question

During the 1930s, the US experienced

answer

depression.

question

New orders for consumer goods and changes in the number of building permits issues for private homes are examples of

answer

Leading indicators.

question

Barter

answer

Exchange of goods and services for other goods and services.

question

Debit card

answer

Card used to make cashless purchases.

question

Overdraft checking

answer

Checking account that allows customers to write checks for more money than try have in their accounts.

question

Thrift institutions

answer

Mutual savings banks, savings and loan institutions, and credit unions.

question

Automated teller machine (ATM)

answer

Units that allow customers to access their banking without the help of a teller

question

answer

Money's that can be spent immediately and against which checks can be drawn

question

Legal tender

answer

Money that must be law be accepted for payment of public and private debts.

question

answer

Money's that can be spent immediately and against which checks can be drawn plus money market fund balances and Eurodollars.

question

Checking account

answer

Account from which deposited money can be withdrawn at any time by writing a check

question

Electronic funds transfer

answer

System of putting onto computes all the various banking functions that in the past were handled on paper.

question

ATMs receive deposits, give out funds, accept payments, and

answer

transfer funds between accounts.

question

The Federal Reserve System was established to

answer

control the amount of money in circulation.

question

The Federal Reserve has the power to

answer

regulate national bank reserves.

question

M2 is

answer

a broader definition of money supply than M1.

question

Representative money is money that is

answer

backed by a valuable item, such as gold.

question

Federal Open Market Committee

answer

12-member committee in the Federal Reserve System that decides how the Fed should control the nation's money supply.

question

fractional reserve banking

answer

system in which only a portion of the deposits in a bank is kept on reserve.

question

discount rate

answer

interest rate the Fed charges on loans to member banks

question

monetary policy

answer

policy that involves changing the rate of growth of the supply of money in circulation in order to affect the cost and availability of credit.

question

prime rate

answer

rate of interest that banks charge on loans to their best business customers.

question

Fed

answer

Federal Reserve System.

question

check clearing

answer

method by which a check that has been deposited in one institution is transferred to the issuer's depository institution.

question

reserve equipments

answer

regulations set by the Fed requiring banks to keep a certain percentage of their deposits as cash in their own vaults or as deposits in their district Fed banks

question

federal funds rate

answer

interest rate banks charge each other on loans

question

The Federal Reserve can affect the money supply by

answer

changing reserve equipments.

question

The number of regional Federal Reserve banks in the US is

answer

12.

question

Which type of institution must belong to the Federal Reserve?

answer

national banks.

question

The chairman of the Federal Reserve Board during the 1990s was

answer

Alan Greenspan.

question

Measuring the money supply has become more difficult in recent years because

answer

more investment opportunities exist, and the use of credits cards has changed the way money circulates through the economy,

question

A) B) C) D)

answer

peak, recession, trough, recovery

question

answer

peak

question

answer

recession

question

answer

trough

question

answer

recovery

question

demand

answer

is what people are willing and able to buy

question

inverse relationship

answer

when price goes up, demand goes down.

question

substitutes are ____ that do similar functions.

answer

goods

question

Law of diminishing utility

answer

an assumption increases, additional benefit decreases.

question

When benefits greater in cost

answer

consumption continues.

question

When benefits less in cost

answer

consumption ends.

question

Law of demad isn't always perfect

answer

sometimes the relationship between price and a change in demand is not as strong for some goods.

question

Elastic demand

answer

quantity is sensitive to small price charges.

question

Elastic examples

answer

bread, water, cereal, and pop.

question

Inelastic demand

answer

situation in which a product's price change has little impact on the quantity demanded by consumers.

question

Inelastic exampls

answer

gas, chargers

question

Elastic is measured of responsiveness between change in ___ and change in the ____.

answer

demand and price.

question

Elasticity formula

answer

Change in quantity divided by original quantity.

question

Elastic

answer

greater than 1.0%

question

Inelastic

answer

less than 1.0%

question

Unit elastic

answer

equal to 1

question

A store changes its price from 10-12 for good. As a result quantity demanded for the good decreases by 5 units, which was orginally 15.

answer

(5/15) divided by (2/10)= 1.67 ELASTIC

question

Economic growth is measured looking at

answer

GDP.

question

Unemployment is measured by

answer

US Census.

question

Inflation is measured with

answer

CPI.

question

Deficits is measured with

answer

a negative amount.

question

Problems measure in Macroeconomics are

answer

economic growth, unemployment, inflation, and deficits.

question

John Keynes

answer

father of fiscal policy.

question

General economic health of a nation can also be judges by looking at several econ indicator which include,

answer

GDP, CPI, unemployment rate.

question

CPI is

answer

consumer price index

question

GDP is

answer

gross domestic price

question

GDP means

answer

total market value of FINAL goods and services produced within a country in a given period of time.

question

Double counting

answer

the value of a good is counted only once.

question

GOLDEN RULE:

answer

no double counting of goods such as used goods, intermediate goods)goods used in production process), money spent on depreciation(replacing old worn-out items.)

question

GDP excludes

answer

transfer payments. (old-young) and items that one produced and consumed at home and that never entered the market place.

question

No ____ ____ are counted because they're already been counted another time.

answer

used goods.

question

GDP measures the value ____.

answer

productions.

question

Would it count? Outback sells baked potatoes from Ireland?

answer

Yes

question

Would it count? Tattoo business sells tattoos

answer

yes

question

Would it count? Kroger buys spam

answer

question

Would it count? When the Popsicle maker buys the sticks

answer

question

Would it count? Schools buys monitor from Dell

answer

yes

question

Would it count? Ice cream that culvers buys for sundaes

answer

question

Would it count? When ford buys a windshield wiper

answer

question

Would it count? Drug dealer pays $200.00

answer

question

Formula for GDP

answer

Y= C+I+G+Xn

question

C in the formula means

answer

consumption.

question

I in the formula means

answer

investment

question

G in the formula means

answer

government purchases spending.

question

Xn in the formula means

answer

net exports (exports-imports)

question

Lets say there is a 4% increase in GDP between Year 1 and Year 2.

answer

appears good, but whats inflation?

question

nominal GDP

answer

values the production of goods and services

question

Nominal GDP GROWTH RATE %=

answer

GDP YEAR-GDP PAST YEAR DIVIDED BY GDP IN PAST YEAR

question

nominal minus inflation equals

answer

real.

question

CPI market baskets focuses on what?

answer

Housing, Food and beverages, and transportation.

question

Macroeconomics

answer

study of behaviors of a total economy.

question

What is not counted in the "G" part of GDP?

answer

transfer payments

question

How are net exports calculated?

answer

exports and imports

question

why do you suppose the US has a negative net export balance?

answer

more imports than exports.

question

Which component of GDP makes up the largest percentage in GDP?

answer

consumption

question

Real GDP

answer

adjusts values of products of goods and services

question

4 categories of items not included in the calculation of GDP

answer

effects on inflation, value of clean environment, amount of debt levels for families, and value of leisure time.

1 of 106

question

Gross domestic product

answer

Total dollar value of all final goods and services produced in a nation in a single year.

question

Transfer payments

answer

Welfare and other supplementary payments, such as unemployment compensation, Social Security, and Medicaid that a state or the federal government makes to individuals.

question

Disposable personal income

answer

Income remaining for people to spend or save after all taxes have been paid.

question

Deflation

answer

Prolonged decline in the general price levels of goods and services.

question

Personal income

answer

Total income that individuals receive before personal taxes are paid.

question

Depression

answer

Major slowdown of economic activity during which millions of people are unemployed, many businesses fail, and the economy operated far below capacity.

question

Consumer price index (CPI)

answer

Measure of the change in price over time of a specific group of goods and services purchased by households. (Inflation)

question

National income

answer

Total income earned by everyone in the economy

question

Business cycle

answer

Irregular changes in the level of total output measured by real GDP.

question

Inflation

answer

Prolonged rise in the general price level of goods and services.

question

The producer price index measures

answer

Changes in the prices producers charge for the goods they sell.

question

Some economists have criticized the CPI because it

answer

Overestimates inflation.

question

The part of the business cycle in which the economy starts to slow down is called

answer

Contraction

question

During the 1930s, the US experienced

answer

depression.

question

New orders for consumer goods and changes in the number of building permits issues for private homes are examples of

answer

Leading indicators.

question

Barter

answer

Exchange of goods and services for other goods and services.

question

Debit card

answer

Card used to make cashless purchases.

question

Overdraft checking

answer

Checking account that allows customers to write checks for more money than try have in their accounts.

question

Thrift institutions

answer

Mutual savings banks, savings and loan institutions, and credit unions.

question

Automated teller machine (ATM)

answer

Units that allow customers to access their banking without the help of a teller

question

answer

Money's that can be spent immediately and against which checks can be drawn

question

Legal tender

answer

Money that must be law be accepted for payment of public and private debts.

question

answer

Money's that can be spent immediately and against which checks can be drawn plus money market fund balances and Eurodollars.

question

Checking account

answer

Account from which deposited money can be withdrawn at any time by writing a check

question

Electronic funds transfer

answer

System of putting onto computes all the various banking functions that in the past were handled on paper.

question

ATMs receive deposits, give out funds, accept payments, and

answer

transfer funds between accounts.

question

The Federal Reserve System was established to

answer

control the amount of money in circulation.

question

The Federal Reserve has the power to

answer

regulate national bank reserves.

question

M2 is

answer

a broader definition of money supply than M1.

question

Representative money is money that is

answer

backed by a valuable item, such as gold.

question

Federal Open Market Committee

answer

12-member committee in the Federal Reserve System that decides how the Fed should control the nation's money supply.

question

fractional reserve banking

answer

system in which only a portion of the deposits in a bank is kept on reserve.

question

discount rate

answer

interest rate the Fed charges on loans to member banks

question

monetary policy

answer

policy that involves changing the rate of growth of the supply of money in circulation in order to affect the cost and availability of credit.

question

prime rate

answer

rate of interest that banks charge on loans to their best business customers.

question

Fed

answer

Federal Reserve System.

question

check clearing

answer

method by which a check that has been deposited in one institution is transferred to the issuer's depository institution.

question

reserve equipments

answer

regulations set by the Fed requiring banks to keep a certain percentage of their deposits as cash in their own vaults or as deposits in their district Fed banks

question

federal funds rate

answer

interest rate banks charge each other on loans

question

The Federal Reserve can affect the money supply by

answer

changing reserve equipments.

question

The number of regional Federal Reserve banks in the US is

answer

12.

question

Which type of institution must belong to the Federal Reserve?

answer

national banks.

question

The chairman of the Federal Reserve Board during the 1990s was

answer

Alan Greenspan.

question

Measuring the money supply has become more difficult in recent years because

answer

more investment opportunities exist, and the use of credits cards has changed the way money circulates through the economy,

question

A) B) C) D)

answer

peak, recession, trough, recovery

question

answer

peak

question

answer

recession

question

answer

trough

question

answer

recovery

question

demand

answer

is what people are willing and able to buy

question

inverse relationship

answer

when price goes up, demand goes down.

question

substitutes are ____ that do similar functions.

answer

goods

question

Law of diminishing utility

answer

an assumption increases, additional benefit decreases.

question

When benefits greater in cost

answer

consumption continues.

question

When benefits less in cost

answer

consumption ends.

question

Law of demad isn't always perfect

answer

sometimes the relationship between price and a change in demand is not as strong for some goods.

question

Elastic demand

answer

quantity is sensitive to small price charges.

question

Elastic examples

answer

bread, water, cereal, and pop.

question

Inelastic demand

answer

situation in which a product's price change has little impact on the quantity demanded by consumers.

question

Inelastic exampls

answer

gas, chargers

question

Elastic is measured of responsiveness between change in ___ and change in the ____.

answer

demand and price.

question

Elasticity formula

answer

Change in quantity divided by original quantity.

question

Elastic

answer

greater than 1.0%

question

Inelastic

answer

less than 1.0%

question

Unit elastic

answer

equal to 1

question

A store changes its price from 10-12 for good. As a result quantity demanded for the good decreases by 5 units, which was orginally 15.

answer

(5/15) divided by (2/10)= 1.67 ELASTIC

question

Economic growth is measured looking at

answer

GDP.

question

Unemployment is measured by

answer

US Census.

question

Inflation is measured with

answer

CPI.

question

Deficits is measured with

answer

a negative amount.

question

Problems measure in Macroeconomics are

answer

economic growth, unemployment, inflation, and deficits.

question

John Keynes

answer

father of fiscal policy.

question

General economic health of a nation can also be judges by looking at several econ indicator which include,

answer

GDP, CPI, unemployment rate.

question

CPI is

answer

consumer price index

question

GDP is

answer

gross domestic price

question

GDP means

answer

total market value of FINAL goods and services produced within a country in a given period of time.

question

Double counting

answer

the value of a good is counted only once.

question

GOLDEN RULE:

answer

no double counting of goods such as used goods, intermediate goods)goods used in production process), money spent on depreciation(replacing old worn-out items.)

question

GDP excludes

answer

transfer payments. (old-young) and items that one produced and consumed at home and that never entered the market place.

question

No ____ ____ are counted because they're already been counted another time.

answer

used goods.

question

GDP measures the value ____.

answer

productions.

question

Would it count? Outback sells baked potatoes from Ireland?

answer

Yes

question

Would it count? Tattoo business sells tattoos

answer

yes

question

Would it count? Kroger buys spam

answer

question

Would it count? When the Popsicle maker buys the sticks

answer

question

Would it count? Schools buys monitor from Dell

answer

yes

question

Would it count? Ice cream that culvers buys for sundaes

answer

question

Would it count? When ford buys a windshield wiper

answer

question

Would it count? Drug dealer pays $200.00

answer

question

Formula for GDP

answer

Y= C+I+G+Xn

question

C in the formula means

answer

consumption.

question

I in the formula means

answer

investment

question

G in the formula means

answer

government purchases spending.

question

Xn in the formula means

answer

net exports (exports-imports)

question

Lets say there is a 4% increase in GDP between Year 1 and Year 2.

answer

appears good, but whats inflation?

question

nominal GDP

answer

values the production of goods and services

question

Nominal GDP GROWTH RATE %=

answer

GDP YEAR-GDP PAST YEAR DIVIDED BY GDP IN PAST YEAR

question

nominal minus inflation equals

answer

real.

question

CPI market baskets focuses on what?

answer

Housing, Food and beverages, and transportation.

question

Macroeconomics

answer

study of behaviors of a total economy.

question

What is not counted in the "G" part of GDP?

answer

transfer payments

question

How are net exports calculated?

answer

exports and imports

question

why do you suppose the US has a negative net export balance?

answer

more imports than exports.

question

Which component of GDP makes up the largest percentage in GDP?

answer

consumption

question

Real GDP

answer

adjusts values of products of goods and services

question

4 categories of items not included in the calculation of GDP

answer

effects on inflation, value of clean environment, amount of debt levels for families, and value of leisure time.

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