Basic Economic Concepts
Measurement of Economic Performance
AS/AD/Fiscal Policy
Monetary Policy
Open Economy And International Trade
100
The cost of what is given up for something else
What is Opportunity Cost
100
People in the labor force who do not have jobs
What is unemployed
100
Price level and Real GDP have a(n) _______ relationship
What is inverse
100
the interest rate that the FED charges commercial banks
What is the discount rate
100
A. The producer that can produce the most output OR requires the least amount of inputs (resources) B. The producer with the lowest opportunity cost
What is absolute advantage & comparative advantage
200
Government owns all business; no self interest
What is Centrally Planned Economy
200
To promote economic growth To limit unemployment To keep prices stable (Limit Inflation)
What are the three major economic goals of a country
200
all the goods and services (real GDP) that buyers are willing and able to purchase at different price levels
What is Aggregate Demand
200
the percent of deposits that banks must hold in reserve (The percent they can NOT loan out).
What is the reserve requirement
200
the equations A. Other goes over B. Other goes under is used in what situations
What is Output & Input
300
This graph compares two goods and the concept of opportunity cost
What is the Production Possibilities Curve
300
the dollar value of all final goods and services produced within a country’s borders in one year is known as
What is Gross Domestic Product (GDP)
300
Wages and resource prices DO NOT increase as price levels increase in
What is the short run
300
a short-term loan (Usually with higher than normal interest rate)
What is a credit card
300
This type of economy trades for the lowest world price
What is an open economy
400
A point outside the Production Possiblitites Curve is considered what
What is Unattainable
400
True or False: Full employment means zero unemployment
What is False
400
When the federal government spends more than it collects in a given year is known as
What is a budget deficit
400
When high unemployment is met with high inflation
What is stagflation
500
These statements involve value judgments while positive statements focus on facts
What are Normative Statements
500
This law states that when unemployment rises one percent above the natrual rate of unemployment, GDP falls 2 percent
What is Okun's Law
500
When US prices rise, foreign buyers buy _____ US goods & US people buy more foreign goods
What is fewer
500
Critical to the conduct of monetary policy
What is the federal funds rate
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