Unemployment
Sharlee was recently laid off from her job at a manufacturing plant when the company she worked for brought in a machine to replace her. This is classified as what type of unemployment?
Structural Unemployment
decisions of the Federal Reserve System that determine the money supply is called
Monetary Policy
A market basket is generally used for
to calculate CPI in order to compare the inflation rate from one year to the next
If you are better than producing a product than another person, you have the _________________ ________________ in producing that product.
A tax on an imported product is a called a ____________. Implementing a tax on an imported product will cause the price of that product to _______________.
Tariff; Rise
Unemployment that occurs as a result of a recession or an economic downturn is
cyclical
Decisions of the government to attempt to influence the economy is called
Fiscal Policy
The total amount of goods and services produced throughout the economy is
Aggregate Supply
If you are can produce a product with a lower opportunity cost than another person EVEN IF they are better at making the product overall, then you have the _____________ _______________ in producing the product.
Comparative Advantage
The price of one nation’s currency in terms of another.
Frictional
Which strictly monetary policy combination would work best to slow down an overheating, overproducing economy?
increase the discount rate, increase the reserve requirement, sell bonds (securities)
Adding everything the U.S. Government owes calculates the
National Debt
Using similar resources, Japan can produce 25 cars or 100 computers. The United States can produce 40 cars or 90 computers. Who has the absolute advantage in production of cars? Who has the absolute advantage in production of computers? Who has the comparative advantage in production of cars? Who has the comparative advantage in production of computers?
Computers - Absolute: Japan; Comparative: Japan
Which trade barrier is associated with laws that require certain shipping methods and proper handling of food or equipment?
Standard
The labor force is defined as
The number of people over the age of 16 that have jobs or are actively looking for a job
What is MOST LIKELY to happen to the economy if the Federal Reserve Bank sells treasury securities at the same time that Congress passes a law increasing taxes?
Aggregate Demand will decrease
Gross Domestic Product is a method for calculating how much a country produces by adding which four spending categories?
Consumer Spending + Business Investment + Government Spending + Net Exports (Exports minus Imports)
The data below shows how much Jessie and Jane can produce given standard baking ingredients and 2 hours. Who has the absolute advantage in baking cookies? Who has the absolute advantage in baking cakes?
Cookies Cakes
JESSIE 10 2
JANE 20 5
Jane has the absolute advantage in baking both cookies and cakes.
Which group is MOST LIKELY to benefit if the US Dollar appreciates against the Yen
Americans purchasing goods from Japan
How do you calculate the unemployment rate?
# of unemployed people / # of people in the labor force
Assume an economy is having high unemployment and low GDP. Which fiscal policy would be most appropriate to correct this situation? Which monetary policy? Give examples for each under the correct policy.
Decrease Discount Rate, Decrease Reserve Requirement, Buy Bonds
If an economy is in a trough on the business cycle, unemployment is ______________, real GDP growth is ______________, and inflation is ___________.
High; Low; Low
The data below shows how much Jessie and Jane can produce given standard baking ingredients and 2 hours. Who has the comparative advantage in baking cookies? Who has the comparative advantage in baking cakes?
Cookies Cakes
JESSIE 10 2
JANE 20 5
Jessie has the comparative advantage in baking cookies; Jane has the comparative advantage in baking cakes.
If a country wanted to implement a barrier to trade that would help its producers AND consumers, which option would be best?
A subsidy