Review

A decrease in government expenditures on goods and services is an example of__________ .

If the economy is at potential GDP and the Fed makes an open market sale of government securities, in the long run the aggregate__________ curve shifts __________and the price level__________

Japanʹs population increased by 3 percent in 2010. As a result, which of the following occurred? i. an increase in potential GDP ii. a rightward shift in the long-run aggregate supply curve iii. a rightward shift in the short-run aggregate supply curve.

When the Fed enacts monetary policy, in the short run it changes

If two currencies allow for the equal value of money so that the same bundle of goods cost the same in two countries, there is

The Keynesian aggregate expenditure model focuses on changes in

-The figure above shows the market for digital cameras. If consumersʹ incomes rise and a digital camera is a normal good, the equilibrium quantity of digital cameras will be________ thousand cameras and the price of a digital camera will be________ .

An economy has real GDP of $300 billion and potential GDP of $240 billion. To move the economy to potential GDP, the government should__________ taxes and/or __________government expenditure.

Cheese (tons) DVDs (thousands ) 0 60 2 56 4 48 6 36 8 20 10 0 -The table above lists six points on the production possibilities frontier for cheese and DVDs. What is the opportunity cost of producing the 7th ton of cheese?

Keynesians and monetarists believe that economic fluctuations are caused

__________occurs when a foreign firm sells its exports at a lower price than its cost of production.

A fiscal action that is triggered by the state of the economy is called

Suppose that a severe shock that decreases investment demand hits the United States. Which of the following can we expect to occur according to the real business cycle model?

If OPEC cuts oil production, then the

When money is accepted as payment in a market transaction, it is functioning as

The number of companies making shoes decreases. As a result, the equilibrium price of a pair of shoes________ and the equilibrium quantity________ .

A processor of alligator hides can produce either purses or shoes. If the demand for alligator shoes increases, then the ________alligator purses will________.

An increase in the population will ________potential GDP,________ employment, and ________the real wage.

An income tax hike__________potential GDP by__________ .

The opportunity cost of holding money is the