1. What is the name of the market where businesses sell products to households and government institutions?
2. How would you describe Real Gross Domestic Product (GDP)?
3. Who is included in underemployment figures?
4. The Bureau of Economic Analysis in the United States is responsible for what?
5. The Federal Reserve is responsible for setting the…
6. Let’s say the government created a 10% income tax surcharge. What changes will occur in the AS/AD model?
7. Where does the largest source of household income originate from in the US?
8. Imagine a country were to increase aggregate expenditures by 20. What will happen to the AD Curve?
9. What is the main function of aggregate demand management policies?
10. Imagine a world where consumer spending is declining. If output is equivalent to potential output, which policy would be ideal according to the AS/AD model
11. What to John Maynard Keynes say about market economies?
12. Based on laissez-faire policy, what is the best way to fix unemployment?
13. Based on the AS/AD model, expansionary monetary policy will have the largest impact on price level when what occurs?
14. What is true about the federal funds rate?
15. If the Federal Reserve wants to increase the federal funds rate from 1% to 1.25%, what monetary policy tool will be used to achieve the increase?
16. What will banks do if the Federal Reserve increases the required reserves for financial institutions?
17. Let’s say the money multiplier is equal to 3 and the Fed decided to change the rate by 1 point. This will cause banks to change their reserves by a total of 300. How can the Fed go about increasing the money supply by 2700?
18 What would happen if the Fed reduced its reserve requirement from 6.5% percent to 5% for financial institutions?
19. Countries can run a trade deficit when they can do the following:
20. What does a weak US dollar do to the economy?
21. In the short run, a trade deficit can be a good thing. What is a trade deficit a bad idea in the long-run?
22. When a country runs a trade deficit, an expansionary monetary policy will most likely do the following:
23. What does the balance of trade measure?
24. How does a country run a trade deficit?
25. Expansionary fiscal policy will result in the following outcomes:
26. Describe the net effect of expansionary fiscal policy on a trade deficit:
27. If US currency interest rates decrease against Mexican interest rates and Mexican inflation decreases relative to the US, then the
28. What is the expected result of expansionary monetary policy?
29. The US sets limits on Italian automobile imports. Limits on the amount of items that can be imported is called what?
30. Duties charged by the government on imported goods, such as canned pickles would be considered what?