Ch 5: Market Equilibrium
If there is excess production of tomatoes in the market. This implies ____________.
the current price is above the equilibrium level.
The direct trade of goods and services for other goods and services is called
barter.
Gertrude is a person who sells narcotics "on the street." Is this activity included in GDP?
It is excluded from GDP figures.
A government will create a surplus in a market when it sets a price ____________ (floor / ceiling) ____________ (above / below) the equilibrium price.
price floor above the equilibrium price.
Money eliminates the need for a coincidence of wants in trading primarily through its role as a
medium of exchange.
The consumption of fixed capital in each year’s production is called
depreciation.
If the news reports that 'Lumber Prices are Way Up,' how would this impact the competitive market for houses?
increase in the price of new homes and decrease in quantity.
Suppose the reserve requirement is set at 11 percent and excess reserves are $28 million. What is the money multiplier?
9.09
One common measure of the "standard of living" in a nation is
real GDP per capita
If the price of gasoline increases significantly, then we’d expect the price for hybrid and electric cars to
increase, and the quantity increase
If a bank is required to hold $1,000 in required reserves and the reserve requirement is 10%, what is the total value of its checkable deposits?
$10,000
GDP in an economy is $11,050 billion. Consumer expenditures are $7,735 billion, government purchases are $1,989 billion, and gross investment is $1,410 billion. Net exports must be
−$84 billion
Suppose there is new fertilizer technology which allows avocados to be grown using less water, how might this affect the market for avocados?
Price decreases and quantity increases
Suppose Gotham City National Bank has excess reserves of $3,000 and checkable deposits of $50,000. If the reserve requirement is 10 percent, what is the size of the bank's actual reserves?
$8,000
One year nominal GDP was $286 billion and the price index was 88. Real GDP that year was
$325 billion.