Supply & Demand
At a price above equilibrium, what exists in a market?
Surplus
GDP measures …?
Changes in the price level (cost of a basket of consumer goods and services)
The Fed’s primary policy tool is …?
Open‐market operations
A “public good” characteristic of clean rivers is …?
Non-excludability (and non-rivalry)
The Great Depression began in what year?
1929
If the price of tea rises, what happens to the demand for coffee?
Demand for coffee increases (they’re substitutes)
The CPI tracks changes in …?
Changes in the price level (cost of a basket of consumer goods and services)
Lowering the reserve requirement tends to …?
Increases banks’ ability to lend increase money supply
Marginal cost pricing for water encourages users to …?
Encourages efficient use/conservation
Bretton Woods established …?
A system of fixed exchange rates (USD↔gold) and created the IMF & World Bank
A rightward shift of the supply curve indicates …?
An increase in supply
Unemployment that arises from normal job search is called …?
Frictional unemployment
“Open-market operations” refer to …?
Buying/selling government securities
A tradable permit system for water rights aims to …?
Allocate water efficiently by capping total use and letting rights be traded
Hyperinflation in Weimar Germany was largely due to …?
Excessive money printing to pay reparations/debts
Price elasticity > 1 implies demand is …?
Demand is elastic
“Stagflation” combines high inflation with …?
High inflation combined with high unemployment
Quantitative easing mainly targets …?
Long-term interest rates (via large‐scale asset purchases)
The tragedy of the commons applies when …?
Individuals overuse a shared resource because each captures the full benefit but shares the cost
The “dot-com bubble” burst around …?
Around 2000
A government-imposed price ceiling set below equilibrium causes …?
A shortage
The output gap is the difference between …?
The difference between actual GDP and potential GDP
A liquidity trap occurs when …?
When interest rates are near zero and monetary policy can’t stimulate lending
Shadow pricing is useful in water projects because …?
Puts monetary values on non-market environmental costs/benefits for better project appraisal
Keynes’ “General Theory” was published in …?
1936