5 Written questions
5 Matching questions
- Transfer Payments
- Velocity of Money
- Upward sloping supply curve
- Ricardian equivalence
- Lower price level:
- a average number of times a dollar is used to purchase final goods and services during a year.
- b -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
- c transfers of income from some individuals to others (social security, unemployment benefits, health care)
- d belief that a tax reduction financed with government debt will exert no effect on aggregate demand
- e direct positive relationship between the price of a good or service and amount suppliers are willing to produce
5 Multiple choice questions
- difference between the maximum amount consumers would be willing to pay and the amount that they actually pay
-below demand curve but above the price
- expansionary fiscal policy during a recession will stimulate aggregate demand and pull us out of a recession.
-Prices are sticky, Economy can't correct itself, Demand creates supply
- results from changes in the economy and imperfect information that prevents workers from being immediately matched up with existing job openings
- built in features tha automatically promote a budget deficit during a recession and a budget surplus during an expansion (without a change in policy
- -Resource Price
-Changes in expected inflation
5 True/False questions
Effect of Unanticipated expansionary monetary policy → shift in monetary policy designed to stimulate aggregate demand.
Loanable funds market (Demand) → -Movement along the curve due to a change in PRICE of a good
Real Interest Rate → percentage of the amount borrowed that must be paid to the lender in addition to the repayment of the principle.
GDP → M1 + savings deposits + time deposits(less than 100, 000) + money market mutual funds
Money supply curve → indicates the inverse relationship between the interest rate and the quantity of money people want to hold.
-downward sloping because as the interest rate increases, people will hold less money