Download Final Exam Key Concepts | ECON 2105 - Econ in a Global Society and more Quizzes Economics in PDF only on Docsity!
An increase in the supply of leather shoes (i.e., leather is an input) could be caused by... a decrease in the price of leather TERM 2 Suppose the money supply (M) is $10 trillion, the cash balance ratio (k) is 0.2 and output (Q) is 25 trillion. What is the equilibrium price level (P) in this economy? DEFINITION 2 2 TERM 3 What will happen to total output and real wages, respectively, in Millivegas, if an outbreak of food poisoning kills 50% of the workforce? DEFINITION 3 Decrease, increase TERM 4 What will happen to real wages and employment, respectively, in Millivegas if widespread use of the internet causes a sharp increase in the human capital of workers? DEFINITION 4 Increase, increase TERM 5 What will happen to total output and real wages, respectively, in Millivegas if immigration rules are changed so that there is a sharp increase in immigration by workers from other nations? DEFINITION 5 Increase, decrease
What will happen to real wages and employment, respectively, in Millivegas if a major tornado destroys a large portion of Millivegas capital stock, but does not injure or kill any humans? Decrease, decrease TERM 7 What will happen to real wages and output respectively, in Millivegas if a major hurricane destroys a portion of the capital stock and also kills a significant fraction of its workforce? DEFINITION 7 Uncertain, decrease TERM 8 How does the FED affect the federal funds rate? DEFINITION 8 They pick a target federal funds rate and then perform open market operations to reach that target and they alter the amount of reserves in banks through the buying and selling of government bonds TERM 9 A headline reading, "FED plans to raise interest rates," means what? DEFINITION 9 The FED plans to decrease the money supply though open market sales and we should expect deflation of prices. TERM 10 Price Level Equation DEFINITION 10 (Average prices in the current year)/ (average price in the base year)
What will happen to and output and employment in the Land OCalrissian if there is a decrease in the unemployment rate because the government no longer offers unemployment benefits? Increase, Increase TERM 17 Shifters for LRAS DEFINITION 17
- Capital Stock Human and Physical + Population + Labor Force Participation Rate When any of these 3 things increases LRAS increases and when they decrease LRAS decreases TERM 18 Labor Force Equation DEFINITION 18 employed)+(not employeed but looking for work) TERM 19 CNP equation DEFINITION 19 Population - institutionalized - under 16 TERM 20 Labor Force Participation Rate Equation DEFINITION 20 (labor force)/[(labor force)+(not employeed and not looking for a job)]
Unemployment Rate Equation Unemployed/ Labor Force TERM 22 Exchange Rate DEFINITION 22 FOREIGN CURRENCY/ $ TERM 23 Shifters for Aggregate Demand DEFINITION 23 Money Supply (increase= AD increase) (decrease= AD decrease) Cash Balance Ration (increase= AD decrease) (decrease= AD increase) TERM 24 GDP Deflator DEFINITION 24 Price Level x 100
