Exam 1
What does "ceteris paribus" mean?
other things being equal
What is the formula for unemployment rate?
(unemployed/total)*100
What does the government do in a contractionary fiscal policy?
cut taxes and increase in government spending
What is the max amount that can be insured with Deposit Insurance?
$250,000 per account
What is another term for Proportional tax?
Flat Tax
What is the price floor?
The lowest price one can legally pay.
What is a basket of goods and service?
a group of items meant to represent the "typical" customer
What term can be used to describe wages in the short run by Neoclassical economists?
sticky
What is the discount rate?
A tax the central bank imposes on loans to commercial banks
What is the National Debt? (termwise)
What happens in a command economy?
The government rules and determines what to produce in the economy.
How can a person be hurt by inflation?
they are holding cash
they have financial asset investments where the nominal return does not keep up with inflation (also can be exacerbated by taxes)
wages lag behind inflation
they are a retiree receiving a private company defined benefit pension
What can people who follow Say's law also be called?
Neoclassical Economists
What is the formula for velocity?
nominal GDP/Money supply
What does a trillion dollars look like?
about a football field full of double stacked $100 bills
What is utility?
What is the difference between GDP and GNP?
GDP is production within country borders, regardless of who produces it. GNP is the production of goods outside of the borders by a given nation.
What does a phillips curve represent?
Inflation vs Unemployment
How many members make up the Federal Open Market Committee?
12
What is the term used to describe the reduction consumption and investment because of government spending?
Crowding Out
What kind of statements should economists try to avoid?
Normative statements
the skills a worker has
What is the main goal of economists within the economy?
fighting inflation
Which member of the FOMC stays for life?
New York
What is the type of federal spending that has been increasing in recent years?
interest payments