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UNK ECON 2
n/a
37
Economics
Undergraduate 2
04/22/2010

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Cards

Term
False about leader/follower countries?
Definition
follower country can grow faster then leaders
1. Japan was a follower is now leader
2. China is a follower
Term
False about constant technology K/L?
Definition
as long as gross savings is above zero output will increase
Term
Bernanke: Chinas Growth Strategy
Definition
They purchase US currency , making there dollar appreciate and ours depreciate
Term
1973 to 1995 United States productivity growth ?
Definition
Went down a lot
Term
1995 to 2000 United States productivity growth?
Definition
grew a lot because of technology
Term
2007 B Quest article on why productivity jumped 42% in 2001 to 2004
Definition
Bush ditched environment regulations and gave business the freedom to operate
Term
how does bureau of labor measure unemployment rate?
Definition
random sample of 60,000 households
Term
What is the natural rate of unemployment?
Definition
there will always be a frictional and structural rate around 4.5%
Term
What is Okuns Law?
Definition
Each 1% above NRU creates negative 2% output gap
Term
Is inflation perfectly anticipated?
Definition
its neutral because if its anticipated then there would be compensation for it
Term
what is false about the relationship concerning consumption and savings?
Definition
Marginal propensity to consume + average PC = 1 , completly false no relationship
Term
What is an investment demand curve?
Definition
the amount of investment that will occur with certain rates
Term
consumption = 465 I = 20 what is GDP?
Definition
GDP = consumption+ I
Term
Increase that wont close recessionary gap?
Definition
an increase in imports
Term
$100 billion dollar increase in gov spending vs $100 billion dollar in raising taxes?
Definition
Gov. spending is better for GDP because of a higher multiplier affect
Term
Says law states...?
Definition
supply creates its own demand
Term
Not a valid explanation for aggraded demand slope?
Definition
income and substitutions
Term
what is false about aggregate supply in the long run?
Definition
anything is flexible (everything is flexible is true)
Term
Fords $5 a day in 1914?
Definition
productivity went up 50% labor cost for cars only went up 35%
Term
an expansion of fiscal policy is?
Definition
reduce taxes or increase government spending
Term
what works as an automatic stabilizer?
Definition
progressive tax system
Term
in 2007 debt was at 9 trillion, now?
Definition
increased 4 trillion, roughly 13 trillion
Term
why isnt the dollar a median of exchange?
Definition
its not backed by gold
Term
M2 includes everything except ?
Definition
BONDS
Term
whats false about the federal reserve
Definition
first central bank
Term
Large reserves for $100
Definition
banks do not like to hold reserves
Term
given the reserve , how much will the money supply increase?
Definition
20% of the reserve would mean half that
Term
why was there a 25% decrease in the M1 money supply 1929 - 1933
Definition
more currency then deposits and excess reserves
Term
what are the two components of money demand?
Definition
transaction demand and asset demand for money
Term
if the quantity money demand is less than the money supply then...?
Definition
interest rates go down, price of bonds go up, and agret demand rises
Term
When the feds buy bonds..?
Definition
reserves increases, intrestrate goes down, investment spending rises, and aggret demand increases
Term
which risk is not eliminated by diversity?
Definition
Market Risk
Term
which risk is not eliminated by diversity?
Definition
Market Risk
Term
if arbitrage moves the price so that the expected return lays on the market line how should you invest
Definition
buy index funds
Term
shortrun Agret supply –Agret Demand curves after an oil shock
Definition
decline in wages shifting agret supply back to the right
Term
Phillips curve shows ?
Definition
shows the lower unemployment rate the higher the inflation rate
Term
laffer curve shows
Definition
higher taxes lead to underground econimics rasing tax rates results in decrease tax revenue because people will work less
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