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Flashcards in Homework Deck (45):
1

A decision made on the margin is primarily a question of ____________________

how much?

2

The goals of equity and efficiency

tend to be in conflict with one another

3

Market failure

When economic interactions lead to inefficient outcomes

4

Marginal decisions are choices about __________________

Making incremental changes

5

The paradox of thrift suggests

When people save in anticipation of an economic downturn, they can worsen the downturn

6

Inflation may cause people

to stop using money and rely on bartering

7

According to Keynsian Economics, a depressed economy is caused by

inadequate spending

8

Movements in inflation are closely related to

Business cycle

9

Most widely used indicator of conditions in the labor market

unemployment rate

10

During recessions

unemployment increases

11

Trade deficit

value of imorts > value of exports

12

The idea that fiscal and monetary policies could be used to fight recessions was proposed by ________________________

John Maynard Keynes

13

In long run, overall level of prices is determined by:

Changes in money supply

14

Long run economic growth

Has important implications for policy concerns

15

Fiscal policy involves

Changes intaxation and government spending

16

Concept of business cycle

crucial role in developing macroeconomics

17

Government agency that calculates CPI

Bureau of Labor and Statistics

18

Overall level of well being

Tends to rise with GDP per capita

19

National income and product accounts keep track of

Consumer spending, business investment, government purchases

20

U.S GDP in 2010

14.5 Billion

21

If inflation rate has been constant, what is happening to overall price level

increasing at a constant rate

22

Consumer spending is _____ percent of GDP

70

23

Price index

Normalized measure of the overall price level

24

Falling GDP associated with ______________

rising unemployment

25

Natural rate of unemployment rises when

new entrants to labor force

26

Unexpected deflation

Makes it harder for borrowers to repay their loans

27

Actual unemployment =

cyclical + natural

28

When unemployment rate is low

most is frictional

29

real wage =

wage/price level

30

efficiency wage

wage set above equilibrium level to motivate workers

31

In 2010, ___ percent of unemployment people were considered long term unemployed

43

32

Costs with changing a listing price

menu costs

33

Unemployment rate based on a survey of ______________

60,000 families

34

Research and development is paid for by

a combination of private and government funds

35

Paul Romer described resarch and development as _____________________

the creation of improved instructions

36

1948 - 2007, labor productivity rose by

2.3 percent per year

37

Productivity depends on:

technology

human capital

Physical capital

38

Natural resources are

less important in determing productivity than human and physical capital

39

Real GDP per capita in 2010 was

7 times as it was in 1990

40

Countries in which investment counts for large part of GDP

have a high domestic savings rate

41

key statistic to track economic growth

real GDP per capita

42

New growth theory suggests that technological change_____________________

responds to economic incentives

43

growth accounting allows us to calculate

the effects of greater physical and human capital on economic growth

44

Annual growth rate of per capita GDP

1.8 percent

45

primary ingredient for long run economic growth

rising labor productivity