5 Written questions
5 Matching questions
- Expenditure Approach
- Median voter theory
- Velocity of Money
- Pork barrel legislation
- High and variable inflation
- a 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.
- b average number of times a dollar is used to purchase final goods and services during a year.
- c Personal consumption expenditures + gross investment + governemnt consumption and gross investment + net exports
- d a package of spending projects benefiting local areas financed through the federal government
- e -reduces investment
-distorts the information delivered by prices
-results in less productive use of resources
5 Multiple choice questions
- government spending is great than government revenues
- upward sloping because an increase in the price level will improve the profitability of the firms and cause them to increase output
- Upward sloping, increasing interest rates will cause people to say no to investing.
- amount of money in the economy, determined by the Fed. It is vertical because it is determined by Fed policy and does not depend on the interest rate.
- the sum of all three types of unemployment
5 True/False questions
Labor force participation rate → percent of population age 16 and over who is in the civilian labor force
Impact of Long run Expansionary monetary policy → shift in monetary policy designed to stimulate aggregate demand.
Shifters of Long Run Aggregate Supply → -Change in Resource base
-change in technology
-Change in arrangements that affect productivity
Lower price level: → -increase the purchasing power of money
-Leads to a lower real interest rate, which increases consumption and investment
-make domestically produced goods less expensive relative to foreign goods
Effect of Unanticipated expansionary monetary policy → shift in monetary policy designed to stimulate aggregate demand.