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Final Exam | EC 2113 - Prin Of Macroecon, Quizzes of Economics

Mississippi State University (MSU)Economics

Class: EC 2113 - Prin Of Macroecon; Subject: Economics; University: Mississippi State University; Term: Fall 2014;

Typology: Quizzes

2014/2015

Uploaded on 12/08/2015

laurenalana2012
laurenalana2012 🇺🇸

56 documents

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bg1
TERM 1
the level of income
DEFINITION 1
the most important determinant of consumer spending is
TERM 2
consume is 3/5th
DEFINITION 2
if carol's disposable income increases from $1200 to $1700
and her level of saving increases from minus $100 to a plus
$100 her marginal propensity to
TERM 3
marginal propensity to consume (mpc)
DEFINITION 3
change in consumption/change in disposable income
TERM 4
marginal propensity to save
(mps)
DEFINITION 4
change in saving/change in disposable income
TERM 5
mpc
DEFINITION 5
1-mps
pf3
pf4
pf5
pf8
pf9
pfa
pfd
pfe
pff

Partial preview of the text

Download Final Exam | EC 2113 - Prin Of Macroecon and more Quizzes Economics in PDF only on Docsity!

the level of income

the most important determinant of consumer spending is

TERM 2

consume is 3/5th

DEFINITION 2

if carol's disposable income increases from $1200 to $

and her level of saving increases from minus $100 to a plus

$100 her marginal propensity to

TERM 3

marginal propensity to consume (mpc)

DEFINITION 3

change in consumption/change in disposable income

TERM 4

marginal propensity to save

(mps)

DEFINITION 4

change in saving/change in disposable income

TERM 5

mpc

DEFINITION 5

1-mps

with a marginal propensity to save 0.4 the marginal

propensity to consume will be

TERM 7

change in income that is

spent

DEFINITION 7

the mpc can be defined as that fraction of a

TERM 8

DEFINITION 8

apc+aps=

TERM 9

the mpc is constant and the apc declines as

income rises

DEFINITION 9

the consumption schedule is such that

TERM 10

average propensity to consume (apc)

DEFINITION 10

c/di

move the econ downward along its existing

investment demand curve

other thins equal a decrease in the real interest rate will

TERM 17

recession

DEFINITION 17

refer to the given graph a movement from b to along c

might be caused by a

TERM 18

wealth effect of an increase in stock market

prices

DEFINITION 18

refer to the given graph a shift of the consumption schedule

from c1 to c2 might be caused a

TERM 19

dissaving is $

DEFINITION 19

refer to the given date at the $200 level of disposable

income

TERM 20

s

DEFINITION 20

di-c=

purchase the machine bc the expected RoR

exceeds the interest rate

assume a machine that has a useful life of only one year

costs $2000 assume also that net of such operating costs as

power taxes and so forth the additional revenue from the

output of this machine is expected to be $2300 if the firm

finds it can borrow funds at an interest rate of 10% the firm

should

TERM 22

investment is made

DEFINITION 22

r>i

TERM 23

investment isn't made

DEFINITION 23

r<i

TERM 24

DEFINITION 24

if the inflation rate is 10% and the real interest rate is 12%

the nominal interest rate is

TERM 25

real interest

rate

DEFINITION 25

nom interest rate-inflation

an increase in stock prices that increases

consumer wealth

which of the following would most likely shift the ad curve to

the right

TERM 32

both input and output prices are fixed

DEFINITION 32

the immediate short run AS curve reps circumstances where

TERM 33

increase in the prices of imported resources

DEFINITION 33

in the diagram a shift from as1 to as3 might be caused by an

TERM 34

rightward shift of the ad curve along an

upsloping AS curve

DEFINITION 34

graphically demand pull inflation is shown as a

TERM 35

panel a only

DEFINITION 35

refer to the diagrams in which ad1 and as1 are the before

curves and ad2 and as2 are the after curves other things

equal a decline in net exports caused by a change in

incomes abroad is depicted by

will increase but real output may increase

decrease or remain unchanged

if ad increases and AS decreases the price level

TERM 37

is designed to expand real

gdp

DEFINITION 37

expansionary fiscal policy is so named bc it

TERM 38

increasing gov spending by $

bill

DEFINITION 38

if the mps in an econ is 0.1 gov could shift the ad curve

rightward by $40 bill by

TERM 39

multiplier

DEFINITION 39

1/mps

TERM 40

initial change in spending

DEFINITION 40

change in real gdp/multiplier

tax multiplier

-mpc/1-mpc= -mpc/mps

TERM 47

decreasing taxes by $

bill

DEFINITION 47

if the mpc in an econ is 0.8 gov could shift the ad curve

rightward by $100 bill by

TERM 48

deficits during recession & surpluses during

periods of demand pull inflation

DEFINITION 48

countercyclical discretionary fiscal policy calls for

TERM 49

larger is the econ's mpc

DEFINITION 49

a tax reduction of a specific amount will be more

expansionary the

TERM 50

increases in gov spending financed through

borrowing will increase the int. rate

DEFINITION 50

the crowding out effect of expansionary fiscal policy suggests

that

a way to keep wealth in a readily spendable

form for future use

when economists say that money serves as a store of value

they mean that it is

TERM 52

they can be readily used in purchasing goods

and paying debts

DEFINITION 52

checkable deposits are classified as money bc

TERM 53

large denominated time deposits

DEFINITION 53

which of the following is not part of the m2 money supply

TERM 54

both m1 and m

DEFINITION 54

currency in circulation is part of

TERM 55

by the gov's ability to control the supply of $

& therefore to keep its value relatively stable

DEFINITION 55

the $ supply is back

when the legal reserves ratio is 30% the monetary multiplier

is

TERM 62

monetary multiplier

DEFINITION 62

1/reserve ratio

TERM 63

DEFINITION 63

if actual reserves in the banking system are $40000 excess

reserves are $10000 and checkable deposits are $

then the legal reserve requirement is

TERM 64

required reserve

ratio

DEFINITION 64

commercial bank's required reserves/commercial bank's

checkable deposit liabilities

TERM 65

varies inversely with the rate of

interest

DEFINITION 65

the asset demand for money

the opportunity cost of holding money

increases as the int. rate rises

the asset demand for $ is downsloping bc

TERM 67

the stock of $ is determined by the fed

reserve system & doesn't change when the

int. rate changes

DEFINITION 67

refer to the diagram of the market for money the vertical

money supply curve Sm reflects the fact that

TERM 68

the purchase of gov bonds in the open market

by the fed reserve banks

DEFINITION 68

which of the following will increase commercial bank

reserves

TERM 69

directly increased by $4 mil & the money

creating potential of the commercial banking

system is increased by $12mil

DEFINITION 69

assume the reserve ratio is 25% and the fed reserve banks

buy $4 mil of us securities from the public which deposits

this amount into checking accounts as a result of these

transactions the supply of money is

TERM 70

lower interest rates an expanded gdp and a

higher rate of inflation

DEFINITION 70

if the fed were to reduce the legal reserve ratio we would

expect