Unit 1-2
What does the Production Possibilities Curve show?
The trade-offs between the production of two goods which both require the same resources for production.
Interest Rate effect refers to the impact that changes in borrowing power has on what?
Aggregate demand and aggregate prices
The ease with which assets can be converted to cash.
U.S. Treasury bills are an example of U.S. government _________
Securities
The ________ _________ is a country's export net income over a period of time.
Current Account
A supply schedule is a table showing the relationship between the ______ of goods and services and the _______ ________ when all other determinants are equal.
price, quantity supplied
This refers to how an increase in one economic activity causes increases across a range of other related economic activities.
Multiplier Effect
The basic form of currency in a country.
Monetary Base
An economy is always operating somewhere along the _____-____ _________ ___________.
Short-Run Phillips Curve
Where a country's currency price is determined by the forex market, which is based on supply and demand.
Floating Exchange Rate
Land, Labor, Capital and Entrepreneurship are all ________ __ ______________.
Factors of Production
A company can choose to set its own prices based on production costs and their desired profits.
Pricing Power
The Fed requires that banks operate on the ______ ________ ________ system, which means that hold a portion of their depositors' money in reserve.
Fractional Reserve Banking
The ________ is a ratio of nominal GDP to a measure of the money supply. (The rate of turnover in the money supply)
Velocity of Money
An ______ _________ is a non-tariff barrier that affects price level, supply and demand, and the forex. These are restrictions on how much of a particular good can be imported into a country.
Import Quota
_____________ Unemployment results from shifts in the economy, sch as the decline of a particular industry.
Structural
When aggregate demand and pricing shift in the short-run, there can be _______ ____ - differences between actual and potential output.
output gaps
The financial institution authorized to produce and distribute money and credit of r a nation and to conduct its monetary policy.
Central Bank
The amount of money a government owes its creditors.
National Debt
If a country exports more than it imports, that indicates the country has a ______ ________.
Trade Surplus
Deflation is an overall drop in the ______ of goods and services.
price
_________ ___________ are payments to individuals with no goods or services provided in return.
Government Transfers
The interest rate charged by a central bank for loans of reserve funds to commercial banks and other financial institutions.
Discount Rate
The ________ ___________ __________ is a measure that shows how an economy's aggregate output/real GDP depends on the determinants of economic growth.
Aggregate Production Function
Countries that freely trade most goods, services, and investments with few tariffs or other barriers.
Open Economy