Units 1 and 2
The idea that not enough resources exist to meet everyone's demands
What is scarcity?
This monetary measure is a measurement of a country's production
What is GDP (Gross Domestic Product)?
This type of aggregate curve measures the long-term national output
What is long-run aggregate supply?
Required Reserves + _______ = Total Reserves
What is Excess Reserves?
When Country A's currency appreciates, Country A will have more ____
What are imports?
This law states that the more of something you have, the more its value lessens
What is the Law of Diminishing Marginal Utility?
In an Expenditure approach, a country's GDP is a combination of its Consumption expenditures (C), Investments expenditures (I), Foreign expenditures (X), and this type of Expenditure.
What are government expenditures?
This phrase describes government laws to stabilize the economy
What is fiscal discretionary policy?
This money supply defines the smallest, most liquid definition of money and includes currency, checkable deposits, and savings accounts.
What is M1?
If a country is relatively more efficient in the production of a good than another country, then they have a ___________
What is a comparative advantage?
This aggregate curve will seemingly shift to the left when prices increase and quantities decrease.
What is the supply curve?
This multiplier is a result of a country's marginal propensity to consume divided by its marginal propensity to save
What is a Tax Multiplier?
The government is most likely to use this type of policy to encourage spending when Aggregate Demand (AD) is too low
What is expansionary fiscal policy?
In an Ample Reserves Framework, Open Market Operations is used to maintain a/an ______.
What is an ample reserve system?
When a country increases their imports, they are getting closer to a trade ______
What is a deficit?
What is the product of an item's price and quantity called?
What is revenue?
Okun's Law defines that for every 1% that the actual rate of unemployment is above/below the natural rate, a 2% gap in _____ occurs
What is Real GDP?
This effect explains that as interest rates go up, there is less investment and borrowing
What is the Crowded-Out Effect?
In a Limited Reserves Framework, the rate that banks pay to borrow money from the central bank (Discount Rate), will do this during a recession.
What is decreasing?
Suppose that 1 dollar is equal to 5 Terrydollars. If John has 65 Terrydollars and spends $10 in the US, how many Terrydollars will he have left?
What is 15 Terrydollars?
In a Circular Flow Model for a Free Market (no government), this entity buys resources and sells products.
What are businesses?
In a Short Run Phillips Curve, _____ has a negative correlation with Unemployment
What is inflation?
This phrase is used when a country is at full employment, but there is still not enough money
What is structural deficit?
Assume all banks start at $0. John deposits $100 in Bank A. Bank A loans out everything it can to Bob. After spending $30, Bob deposits the remaining money in Bank B. Bank B lends $54, or everything it can to Sarah. What is the Reserve Requirement Ratio?
What is 10%?
In Limited Reserves, an Expansionary Monetary policy will lower discount rates and increase the ______
What is money supply?