Free Lunch?
The most fundamental issue that economics addresses.
What is how to use scarce resources?
Suppose that personal income is $3,500 billion, personal taxes are $1,000 billion, and depreciation is $500 billion. Disposable income is equal to...
What is $2,500 Billion?
An increase in consumer income causes this type of shift in the demand for a normal good.
What is a rightward (increase) shift in the demand curve?
This type of fiscal policy involves increasing government spending or cutting taxes to combat a recession.
What is expansionary fiscal policy?
If the U.S. dollar appreciates against the euro, American exports to Europe become this.
What is more expensive (less competitive / decreased)?
This 2023 film starring Margot Robbie and directed by Greta Gerwig grossed over $1.4 billion worldwide, becoming the highest-grossing film ever directed by a solo woman.
What is Barbie?
This is one measure of the economy that cannot be illustrated using the production possibilities curve.
Describe spending in a circular flow model.
What is households purchase goods and services from producers in product markets?
When the price of a resource like oil rises sharply, the aggregate supply curve shifts in this direction.
What is a leftward (decrease) shift in the SRAS/AS curve?
An expansionary monetary policy is intended to eliminate which type of unemployment?
What is cyclical unemployment?
When U.S. interest rates rise relative to other countries, this happens to demand for the U.S. dollar in the forex market.
What is an increase in demand for the dollar? (Hot money flows in seeking higher returns)
This animated TV show, created by Matt Groening, holds the record as the longest-running American animated series.
What is The Simpsons?
When two nations specialize according to their individual comparative advantages and engage in trade, this happens.
What is both nations can consume past their individual ppcs.
When an economy is in equilibrium at potential gross domestic product, the actual unemployment rate is
What is equal to the natural rate?
This curve shifts right when worker productivity improves, reflecting lower per-unit production costs.
What is the Short-Run Aggregate Supply (SRAS) curve?
When the Fed sells government bonds on the open market, this happens to the money supply.
What is a decrease (contraction) in the money supply?
This is the term for the account that records all purchases and sales of financial assets between countries, such as stocks, bonds, and real estate.
What is the financial account?
THIS SHARK COMES AFTER BABY SHARK
WHAT IS MOMMY SHARK?
A change in this will cause a movement along the demand curve for a product.
What is the price?
Alice, who has left her job in New York, is moving to Atlanta and looking for a job. In terms of employment status, Alice can most accurately be described as
A rise in expected future prices by consumers causes this in the current aggregate demand curve, even before prices actually change.
What is a rightward shift in AD? (Higher consumer expectations increase current spending)
This monetary policy tool is the interest rate banks charge each other for overnight loans, and is directly set by the Fed.
What is the federal funds rate?
The U.S. imposes tariffs on Chinese goods. Trace the effect on the yuan: does it appreciate or depreciate, and why?
What is the yuan depreciates? (Reduced U.S. demand for Chinese goods → less demand for yuan in forex → yuan falls in value)
This sarcastic Valley Girl phrase from the 1980s was used to mock something seen as overly annoying, dramatic, or disgusting.
What is “gag me with a spoon”?
The implementation of these will increase the market supply for new automobiles.
What are subsidies or lower taxes on automotive manufactures?
These are not included in GDP. List them (5).
What non-market transactions (unpaid housework, volunteer work), intermediate goods, used goods (second-hand sales), financial transactions (stocks/bonds), government transfer payments (social security), & illegal activities.
When the government increases infrastructure spending, both this curve and real GDP shift right in the short run.
What is the Aggregate Demand (AD) curve?
This phenomenon occurs when government borrowing drives up real interest rates, reducing private investment spending.
What is crowding out?
A country running a current account surplus must be running this in its financial account, by the balance of payments rule.
What is a financial account deficit? (The accounts must sum to zero)
In chess, this move allows a player to simultaneously move the king two squares and place the rook on the other side of the king.
What is castling?
A simultaneous increase in both the demand for and the supply of a good in a market will lead these changes in the equilibrium price and quantity of the good.
What is indeterminate price and increased quantity?
What is the formula for Real Gross Domestic Product ?
Real GDP = (Nominal GDP / GDP Deflator) X 100
An improvement in technology permanently shifts this curve to the right, indicating the economy can sustain a higher level of output.
What is the Long-Run Aggregate Supply (LRAS) curve?
An economy operating above full employment calls for this combination of fiscal and monetary policies to cool inflation.
What is contractionary fiscal policy (raise taxes / cut spending) AND contractionary monetary policy (raise interest rates / sell bonds)?
An appreciation of the United States dollar on the foreign exchange market could be caused by a decrease in this one year summery of the national shopping cart.
The United States consumer price index? (Market Basket)
This is the only planet in our solar system that rotates on its side, with an axial tilt of about 98 degrees.
What is Uranus?
This will occur in a competitive market when the price of a good is less than the equilibrium price.
What is the price will increase to eliminate the shortage and restore equilibrium
If a worker’s nominal wage rate increases from $10 to $12 per hour and at the same time the general price level increases by 10 percent, the worker’s real wage has
What is approximately increased by 10%?
In the loanable funds market, a new mandatory pension savings law causes this shift, lowering the real interest rate.
What is a rightward shift in the supply of loanable funds?
Automatic stabilizers like unemployment insurance are examples of this type of fiscal policy that requires no new legislation.
What is passive (or non-discretionary) fiscal policy?
Country A runs a current account deficit. Explain the complete chain of effects on its currency, capital account, and domestic interest rates under a floating exchange rate system.
Current account deficit → supply of currency increases (paying for imports) → currency depreciates → exports become cheaper / imports pricier → eventually rebalances. Capital account surplus offsets (foreign investment inflows). Higher demand for loanable funds can raise domestic real interest rates.
What is the national animal of Scotland?
The unicorn