Output and Growth
Unemployment
Money and Monetary Policy
International Trade
Sources of Government Revenue
100
What is real GDP per capita?
The dollar amount of real GDP produced for every person in the economy.
100
What is the unemployment rate?
The number of unemployed individuals divided by the total number of persons in the civilian labor force.
100
What is a balance sheet?
A condensed statement showing all assets and liabilities at a given time.
100
What is an absolute advantage?
When a country is able to produce more of a given product than another
100
What are taxes on income, sales, and property?
A way the government raises revenue.
200
What does GDP measure?
GDP measures economic activities and production within the market system including both tangible and intangible services.
200
What is structural unemployment?
structural unemployment is a fundamental change in the operations of the economy, which reduces the demand for workers and their skills.
200
What is liabilities?
Assets = Net Worth + ______
200
What is a comparative advantage?
The more efficient country in producing products.
200
What are the forms that a government collects revenue?
College tuitions, social security contributions, unemployment insurance contributions, and driver's license fees.
300
What are the three macroeconomic policy objectives typically pursued by governments?
High and stable economic growth, low unemployment, low inflation
300
What is cyclical unemployment?
Cyclical unemployment is directly depends on a business cycle such as recession
300
Explain each tool of monetary policy
There are 5 tools: -Reserve requirement: sets the minimum reserves each commercial bank must hold. -open market operations: central bank to buy or sell government bonds in the open market. -Discount rate: the change in interest rate that is charged to borrow short term funds. -Moral suasion: pressure, but not force, by an authority, to get members to hold to a policy. -selective credit controls: establish selective terms for various credit instruments or restrict bank finance against sensitive commodities.
300
What is the tariffs and quotas?
Tariff is taxes placed on imports to increase their price in the domestic market and quotas are limits placed on the quantities of a product that can be imported.
300
What is the economic impact of taxes?
It reduces the income of individuals and businesses.
400
How is disposable income calculated?
DI=PI-personal taxes (TP)
400
What are the causes of inflation and the inflation rate equation?
Demand pull, government deficit, cost push, wage price spiral, and excessive monetary growth (change in price level/beginning price level)x100
400
What is the money multiplier and how to calculate it?
Federal reserve system goal is to limit growth of money supply (1/reserve requirement)=mm
400
What is the foreign exchange rate?
The price of one country's currency is described in terms of another country's currency.
400
What are the 5 causes of inflation?
demand-pull, cost-push, a rise in production and labor cost, expansion of money supply, real demand for goods or services
500
What are three purposes of measuring the economic growth rate?
economic welfare comparisons, international comparisons, and business cycle forecasts
500
What are the consequences of inflation?
the dollar buys less, spending habits change, speculation increases, and the distribution of income is altered
500
What is the demand deposit accounts?
the accounts whose funds could be removed by simply writing a check without prior approval from the depository institution.
500
What happen as there is a change in the value of a dollar?
As the dollar goes up, export goes down and import rises, which causes problems for the balance of payments but when the dollar goes down, imports become more expensive and the balance of payment tends to improve
500
Why do so many governments use tobacco taxes to raise revenues?
because people don't really care even though the taxes of tobacco increases. People's demand for tobacco is always high because they addicted to it
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