- Shuffle
Toggle OnToggle Off
- Alphabetize
Toggle OnToggle Off
- Front First
Toggle OnToggle Off
- Both Sides
Toggle OnToggle Off
Front
How to study your flashcards.
Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key
Up/Down arrow keys: Flip the card between the front and back.down keyup key
H key: Show hint (3rd side).h key
PLAY BUTTON
PLAY BUTTON
31 Cards in this Set
- Front
- Back
- 3rd side (hint)
|
What does Elasticity allow us to analyze?
|
Supply and demand
|
|
|
Elasticity is a measure of what?
|
How much buyers and sellers respond to changes in market conditions.
|
|
|
The elasticity of demand is a mesure of what?
|
How much the quantity demanded of a good responds to a change in the price of that good.
|
|
|
What are the 4 determinants of demand elasticity
|
1.Availability of substitutes.
2.Necessities v.s. Luxeries. 3.Defination of the market. 4.Time horizon. |
|
|
Demand seems to be more elastic when...
|
1.there's a large # of close substitues.
2.the good is a luxury. 3.Narrowly defined market. 4.The longer time period-> increases with time |
|
|
What are the 4 Types of demand curves?
|
1. Inelastic
2.Elastic 3.Perfectly inelastic Perfectly elastic. |
|
|
Whats the differnce between elastic and inelastic
|
elastic- flutuates, changes constantly, a want.
inelastic- a need, does not change. |
|
|
The functions of money are...
|
Medium of exchange, unit of account, and store of value
|
|
|
A medium of exchange is...
|
Anything readily acceptable as payment.
|
Money |
|
A unit of account is...
|
The yard stick people use to:
post prices and record debts |
money |
|
A Store of value is...
|
an item that people use to:
transfer purchasing from the present to the future. |
Money in da bank... |
|
Liquidity is...
|
The ease with which an asset can be converted into the economy's medium of exchange
|
money |
|
What are the two kinds of money, and what is the difference?
|
1.Comodity- intrisic value-GOLD
2.Fiat-Goverment decree-DOLLARS |
|
|
The Federal reserve System serves as what?
|
The Nations central Bank.
|
|
|
What do the feds regulate.
|
the amount of money in the economy.
|
|
|
When and why was the feds created?
|
It was created in 1914
after a series of bank failures. |
|
|
What is the structure of the feds?
|
Board of govenors
Regional fed. Reserve banks FOMC |
3 branches |
|
Who runs FOMC?
|
the board of govenors
|
|
|
How many members are on the board of govenors and how long are there terms?
|
7 Members
14 year terms |
|
|
Who confirms the board of govenors, and what are the three types of members that make up the FOMC?
|
The Senate
and the Chairman and the other members of the board ot gov, The president of the fed bank in NY, and the Pres of the other fed banks. |
|
|
How long is the term for the Chairman?(board of gov.)
|
4 years
|
|
|
What are the feds primary functions?
|
regulates banks to promote safe banking
makes loans to banks as a LENDER OF LAST RESORT. Conducts monetary policy |
|
|
Monetary policy, conducted by the FOMC, does what?
|
Sets the money supply by policy makers in the central bank.
|
|
|
What are the tools of monetary policy?
|
Open market opperations, Discont rate, and Reserve requirments.
|
|
|
What are the problems in controlling monet supply?
|
it's not precise
Doesn't control the amount of money banks choose to lend |
|
|
Fluctuations in the economy are...
|
Irregualr and unpredictable.
Most Macroeconomic quantities fluctuate together(unemployment) As output falls, Unemployment rises. |
|
|
The aggrregate demand curve shows what?
|
The quantity of goods and services that households, firms, and the goverment want to buy at each price.
|
|
|
What is the difference between Demand and aggregate demand?
|
demand- Measures the quantity of a PARTICULAR good or service in the economy.
aggregate demand- Measures to quantity of ALL goods and services demanded-GDP |
|
|
"why would the aggregate demand curve go downward", what would you need to solve this?
|
Revist GDP
Wealth effect+Interst rate effect+Exchange rate effect. |
|
|
Why would the aggregate demand curve face downward according to the wealth effect?
|
A decrease in price level makes consumers wealthier, which encourages spending, and the increase in consumer spending means a larger quantity of goods and services demanded.
|
|
|
Why would the aggregate demand curve face downward according to the Interest-rate effect?
|
the lower the price level, the less money households need to buy goods and services. Households will reduce their holding of money by lending out some.As money is converted into interest, rates are lowered.This encourages borrowing by firms who wish to invest in new plants ans capital.this increases the quantity of goods and services demanded.
|
