Risk
List 3 types of insurance.
car, health, home, life, renters, disability and/or long term care
The Labor force = _____ +_______
employed + unemployed
List the following in order from most liquid to least liquid: stocks, cash, a house
Cash, Stocks, a House
The supply for money is determined by who?
The Fed
In the PV and FV equations, what does 'N' represent?
Risk averse means that we _____ (like/dislike) uncertainty and therefore are willing to pay to _____ (avoid/increase) risk.
dislike, avoid
Anyone who is not employed or unemployed. Examples: College Students, Retried
On the money supply chart, which is larger, M1 or M2?
M2
When people reduce their money holdings this can be known as _____ costs
shoe leather
What is componding?
Interest on interest
True of false: Insurance reduces the risk that bad things will happen.
False
Frictional Unemployment is _____
Structural Unemployment is _____
(long run/short run)
short run
long run
On a T account what are the two columns?
Assets and Liablities
True or False: there can be too much money in the economy.
true
True or False: Businesses dislike Unions.
True
What is an example of moral hazard?
ex. if someone participates in extreme sports, like sky diving, they will have higher medical insurance.
What is the normal % of the natural rate of unemployment?
4.5-5.5%
What is the central bank of the United States and how many parts are there?
The Federal Reserve, 3 main parts
When the value of money increases, the price level _______(increases or decreases)
decreases
What type of Unemployment is caused mainly by the business cycle?
Cyclical Unemployment
What is the difference between Idiosyncratic risk and Aggregate risk?
Idiosyncratic Risk: this is the risk that affects only a single economic factor, diversification helps to reduce or eliminate this risk.
Aggregate Risk: risk that effects all economic factors at once, diversification cannot reduce this risk.
Health care is an example of ______ benefits
mandated
List the Fed's three policy instruments
1. Open Market Operations
2. Discount Rate
3. Changing banks' reserve requirements
The Classical Ditchotomy says that which variables are affected and which are not?
Nominal variables are affected
Real variables are not affected
What is the Velocity of Money?
The rate at which money circulates through an economy