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28 Cards in this Set

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