Vocabulary
The opportunity cost of something is
what is given up to acquire it
The largest component of GDY or factor income in GDP accounting is
wages
What is produced in a market system is determined by
consumers
The difference between the actual unemployment and the natural unemployment rate is the
cyclical unemployment
Tax incidence measures the distribution of the
indirect tax/sales tax
Economic data that are adjusted for price level changes are said to be expressed in terms of
real dollars
A period of falling real gross domestic product and an increase in transfer payments is likely a(n)
contraction
Society has a dilemma determining what goods and services should be produced because
resources are scarce and/or unlimited wants
If exports to trading partners abroad are less than imports then net exports are
negative
If a good does not have many substitutes, then the demand for this good will be relatively
inelastic
What kind of relationship does the value of money have with inflation?
inverse or negative relationship
Goods that are produced in a particular period but not sold in that period go into inventories and are a part of
investments
A shift of a demand curve to the right, other things being equal, will
increase price and increase quantity (supplied)
Markets in which firms obtain labor services from households are known as
resource, factor, or labor market
The government selects specific goods such as gasoline or cigarettes to tax because
these goods are highly unavoidable
Any point inside a production possibility frontier indicates
inefficiency and/or unemployment
True or False? The purchase of your neighbor's 1999 Toyota will be included in this years GDP.
False
Other things being equal, a tax that leads to an increase in the cost of production would
decrease supply... increase price, decrease quantity (demanded)
When the circular flow is in equilibrium, domestic income equals
domestic output
True or False? A price policy of rent control may result in landlords leaving the business because they cannot cover costs.
True
True of False? Imports purchased from trading partners abroad is a leakage in the circular flow model.
True