| Basic Economic Concepts | ||
| #1 | What is economics? | the study of scarcity and choice |
| #2 | What is the main problem in economics? | scarcity |
| #3 | the value of what you give up when you make a particular choice | opportunity cost |
| #4 | any point located on the PPC is considered to be ____? | efficient |
| #5 | technology is a source of? | economic growth |
| Measurement of Eco Performance | ||
| #1 | the stage between a trough and a peak in the business cycle? | expansion |
| #2 | What is the law of demand? | higher price, less demand; lower price, higher demand |
| #3 | what are the components of GDP? | consumer spending, investment spending, government purchases, net exports |
| #4 | What is real GDP? | total value of all goods and services produced in the economy, using base year prices |
| #5 | Who would be considered unemployed? | people who aren't employed but actively looking for a job. |
| AD-AS Model | ||
| #1 | what is the horizontal axis in the AD-AS curve? | Real GDP |
| #2 | what type of shift does an increase in purchasing power cause? | AD shifts to the right |
| #3 | If the government reduces spending, what shift will happen? | AD curve shifts to the left |
| #4 | What are sticky wages? | nominal wages that are slow to change (SRAS) |
| #5 | Why is the LRAS curve a vertical line? | nominal wages are fully flexible |
| Financial Sector | ||
| #1 | what is a progressive income tax? | tax rates increase, when income increases |
| #2 | What is the formula to calculate total budget deficit? | structural deficit + cyclical deficit |
| #3 | when does a budget deficit occur? | government expenditures are greater than tax revenues for a single year |
| #4 | when in a recessionary gap, what do economists propose? | expansionary fiscal policy |
| #5 | a 1:1 ratio, occurs in what type of crowding out? | Complete crowding out |
| A bit of everything | ||
| #1 | The intersection of the SRAS curve and the AD curve is known as __? | Short-run macroeconomic equilibrium |
| #2 | What effect does a negative demand shock have on the AD-AS model? | AD curve shifts to the left |
| #3 | MPC+MPS will always equal ___? | 1 |
| #4 | what is the formula to calculate the inflation rate? | PL in yr 2- PL in yr 1 / PL yr 1 x 100 |
| #5 | Minimum wage is an example of a __? | price floor |
| Final Question | |