1
True or false- a decision maker takes an action if the marginal benefit is greater than the marginal cost
true
When quantity supplied exceeds quandy demanded there is a _______.
Surplus
What is the formula for GDP? What does it measure
Y=C+I+G+NX
Total income of everyone
Total expenditure of everyone
If a bond has a longer term, will it have a higher or lower interest rate?
higher
If the Fed increases the reserve requirement does this increase or decrease the money supply?
Decrease
what is the opportunity cost?
what you give up to get something
True or False- Change in demand is caused by a change in price
False- change in quantity demanded is changed by price
For an economy as a whole, income = ______.
Expenditure
The __________ is the price of borrowing
interest rate
What happens to the demand for money when the price level increases?
It increases
What is the difference between comparative and absolute advantage?
Comparative- Can produce with a lower opportunity cost
Give an example of Compliments
Give an example of Substitutes
Compliments- Hot dog and hotdog buns
Substitutes- Coke and Pepsi
True or false- the purchase of a used car would effect GDP
False- only new goods and services
Does the US use commodity or fiat money?
Fiat
What is velocity?
The number of times a year a dollar is spent
Which market is almost always the best way to organize economic activity?
Free market
What is an inferior good? Give an example of it
What does CPI measure?
The cost of living, or the standard of living
The amount of money that a bank holds in reserves and does not lend is called the ______ ratio.
Reserve ratio
What would happen to the price level if the money supply doubled?
The price level would double
Economics is the study of ______________.
Human behavior
Give a characteristic of a perfectly competitive market
- lots of buyers and sellers
-goods offered for sale are identical
Which groups of people are accounted for in the labor force?
Employed and Unemployed
True or false - If the Fed wants to increase the money supply they buy bonds
True
What is one determinant of demand?
-Number of buyers
-Income
-Buyers Expectations of the future
-Consumer preference
-Prices of related goods