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28 Cards in this Set
- Front
- Back
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U.S. gross domestic product is the market value of all the ______ produced _________ in a ______.
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final goods and services;within the United States; given time period
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We ________ the value of intermediate goods and services produced to the value of final goods and services to measure GDP.
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do not add
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________ is an example of US consumption expenditure.
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Your purchase of a tire for your car
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What is included in the expenditure approach to calculating GDP?
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consumption expenditure, net exports of goods and services, government expenditure
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To isolate the increase in production from the rise in prices, we distinguish between ______ GDP and nominal GDP.
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real
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Real GDP _____ include a measure of household production or underground economic activity
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does not
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__________ GDP per person grows at a steady pace but not at a constant pace
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Potential
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The higher than normal unemployment at a business cycle trough and the lower than normal unemployment at a business cycle peak is _________ unemployment.
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cyclical
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The natural unemployment rate ________
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is the unemployment rate at full employment
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When the unemployment rate is less than the natural unemployment rate, real GDP is ___________ than potential GDP and the output gap is ________.
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greater;positive
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By measuring _______, we can see that the economy of Singapore has caught up to and surpassed the economy of the United States
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real GDP per person
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An increase in labor productivity ________
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shifts the demand for labor curve rightward and the production function upward
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The fundamental precondition for labor productivity growth is __________
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the incentive system created by firms, markets, property rights, and money
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The pace of labor productivity growth is influenced by all of the following except ______________
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population growth
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According to classical growth theory, when real GDP per person _________, the population grows
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rises above the subsistence level
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According to new growth theory, ________ experience diminishing returns.
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knowledge is capital that does not
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How can the change in US wealth differ from US saving?
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The change in wealth includes changes in the prices of assets owned and saving excludes these items
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A decrease in current income taxes ______ the supply of loanable funds today because it ______
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increases;increases disposable income, which encourages greater saving
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A government budget surplus occurs, which ______. The real interest rate ______, household saving ______, and investment ______.
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increases the supply of loanable funds; falls; decreases; increases
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If a country's net exports are _____, the rest of the world supplies funds to that country and the quality of loanable funds in that country is _______ than national saving
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negative, greater
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Money serves as a ______
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medium of exchange, which means that it is generally accepted in exchange for goods and services
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Depository institutions provide four benefits, which are
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creating liquidity, lowering the cost of borrowing, lowering the cost of monitoring borrowers, and pooling risk
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One of the fed's main policy tools is ________
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the last resort loan, which means that if a bank is short of reserves, it can borrow the Fed
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The liabilities of the Fed are _____, and these liabilities along with ________ make up the monetary base.
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Federal Reserve notes held by households and businesses and reserves of depository institutions; coins issued by the Treasury
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An open market operation is ______
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the purchase or sale of securities by the Federal Reserve System in the loanable funds market
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The money multiplier is the ratio of the change in the quantity of _____ to the change in the quantity of ______
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money;monetary base
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On average in the US, inflation rate and money growth rate minus the real GDP growth rate _____
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rise and fall together
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The US M1 multiplier is _______ than the US M2 multiplier because the currency drain ratio for M1 is _____ than for M2, and the banks reserve ratio for M1 is ______ than for M2.
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smaller;larger;larger
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