Midterm 1 Flashcards
Macroeconomics distinguishes between the real economy and the…
monetary economy
During business cycles the opposite of a trough is…
a peak
According to the analysis of the British economist John Maynard Keynes,…
government demand could be used to smooth fluctuations in aggregate output and income
In order to influence spending on goods and services in the short-run, monetary policy is directed at directly influencing…
interest rates
“Inflation is generally procyclical” means…
“the rate of inflation tends to rise in periods of high economic growth and fall in periods of low economic growth”
Economics that passes judgment, or provides advice on policy actions is called…
normative economics
An important indicator of a nation’s well-being is…
gross domestic product (GDP)
Until the First World War, prices…
were as likely to fall as they were to rise (trendless)
Which economist represents a very different point of view to that of Keynes?
Adam Smith
From 2010 to 2015, real income per capita in Italy declined by…
6%
Which of the following transactions would be recorded in the French current account of its balance of payments statistics?
a) A French resident buys a Volkswagen car produced in Wolfsburg, Germany.
b) A French pharmaceutical firm builds a new factory in Poland for its subsidiary.
c) A French national living in Switzerland buys a house in Switzerland.
d) A French bank sells an Italian bond to another French bank.
a) French resident buys a Volkswagen car produced in Wolfsburg, Germany.
Which of the following national economic accounting identities is correct for national accounts that include a private sector, a government sector and a foreign sector?
a) (S-I) +(T-G)+(X-Z)=0
b) (S-I) +(X-Z)=(T-G)
c) (S-I) +(T-G)=(X-Z)
d) (S-I) =(T-G)+(X-Z)
c) (S-I) +(T-G)=(X-Z)
By “absorption” economists mean…
total domestic spending by households, firms and governments on goods and services, both domestic and foreign
Real GDP is a measure of a country’s…
physical output
An increase in the nominal GDP by 6% can correspond to…
a decrease of real GDP by 4% and an increase of prices by 10%
