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5 Written Questions

5 Matching Questions

  1. Automatic Stabilizers
  2. Loanable funds market (Demand)
  3. Velocity of Money
  4. Civilian labor force
  5. GDP
  1. a Number of people age 16 or older who are employed or unemployed
  2. b built in features tha automatically promote a budget deficit during a recession and a budget surplus during an expansion (without a change in policy
  3. c only counts goods and services produced within the geographic borders of a country
    -does not count transfers (welfare, gifts of money)
  4. d average number of times a dollar is used to purchase final goods and services during a year.
  5. e Downward sloping because as interest rate decreases firms will want to borrow more money

5 Multiple Choice Questions

  1. -ability to forecast is extremely limited
    -change in fiscal policy requires legislaive action
    -Change will not have an immediate effect on the economy
  2. -statement is not testable
  3. Changes in quantity are sensitive to changes in price
    -elastic curves are flatter
    -perfect = horizontal
  4. the idea that a vote maximizing politicial in a two party system will be close to the middle so that there is little difference between candidates, and the preferences of the median voter will be represented.
  5. -the difference between price producers are willing to accept and price they actually receive
    -area above the supply but below the price

5 True/False Questions

  1. Store of Valueinterest rate the Fed charges banking institutions to borrow funds


  2. New classical view of fiscal policy-total market value of all final goods and services produced by the citizens of a country
    -counts income that americans earn abroad
    -ignores the income foreigners earn in the U.S.


  3. Lower marginal tax rate-will give people the incentive to work more
    -if believed to be long term will shift both SRAS and LRAS
    -long run growth oriented strategy


  4. 3 Functions of Money-Medium of Exchange
    -Store of Value
    -Unit of account


  5. Positive Economic Statement-statement that is testable


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