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Kara voluntarily quit her job as an insurance agent to return to school full-time to earn an MBA degree. With degree in hand she is now searching for a position in management. Kara presently is:
The maximum number of shares authorized under the terms of a corporation's articles of incorporation.
Ways to calculate GDP: Expenditure Approach
-Personal Consumption (C) + Gross Private Domestic Investment (Ig) + Spending (G)+ Net Exports (Xn= Exports-Imports
- C + Ig + G + Xn
Most economists agree that the immediate cause of most business cycle variation is
An unexpected change in the level of total spending
In comparing GDP data over a period of years, a difference between nominal and real GDP may arise because
The price level may change over time
Economic systems differ according to which two main characteristics?
Who owns the factors of production, and the methods used to coordinate economic activity
GDP (Gross Domestic Product)
Market value of all final goods and services produced within the borders of a single country in a year
Characteristics of a Market System
- Freedom of Enterprise
- Competition in the product and resource market
- Private property
According to the Bureau of Labor Statistics, to be officially unemployed a person must:
Be in the labor force
- Not voluntary, do not have skills necessary for employment, long term
- Historically 2%
Firms are motivated to minimize production costs because:
Competitive pressures in the market will drive out higher-cost producers
Real GDP is:
The nominal value of all goods and services produced in the domestic economy corrected for inflation
A price index is:
A comparison of the current price of a market basket compared to a fixed reference point
. The United States' economy is considered to be at full employment when:
About 4-5 percent of the labor force is unemployed
In national income accounting, consumption expenditures include:
Consumer durable goods, consumer non durable goods, and services
The value added of a firm is the market value of:
A firm's output - the value of the inputs bought from others
The practical significance of the multiplier is that it:
Magnifies the initial changes in spending into larger changes in GDP.
In the late 1990s the U.S. stock market boomed, causing U.S. consumption to rise. Economists refer to this outcome as the:
Marginal Propensity to Consume
Increase in desire to consume that results from an increase in income
Other things equal, an increase in an economy's exports will:
increase its domestic aggregate expenditures and therefore increase its equilibrium GDP.
A spending category through which governments can spend through an appropriations bill.
Appropriations bill--> Discretionary spending
An act of a legislature authorizing money to be paid from the treasury for a specified use.
Significant contributor to the U.S. public debt?
- Increases in military spending
- Tax cuts and expenditure increases in the 1980s
The crowding out effect
The financing of a government deficit increases interest rates and, as a result, reduces investment spending.
The investment demand curve will shift to the right if:
Businesses become more optimistic about future business conditions
In an economy which trades with other economics, equilibrium GDP is determined at that point where:
S +imports + T = Ig + exports + G.
The amount by which government spending is greater than tax revenues collected is the:
Investment spending in the United States tends to either increase or decrease from year to year because:
Changes in expected profits and changes in technology are different from year to year.
The Treasury covers government budget deficits by:
Selling Treasury bonds inside and outside the United States
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