Exam 2: Economics and Banking

Describe how the consumer price index (CPI)uses the "market basket" to measure price changes.

Goods tracked by the PPI include ________ and ________.

A rise in the general level of prices over time is called ________.

What are some consequences of a high unemployment rate? What are some consequences of a low unemployment rate?

Why does the U.S. Bureau of Labor Statistics evaluate the CPI's "market basket"?

The following is NOT an example of a factor that would determine supply of a product:

Changes in the price of resources do not help determine supply because those resources can be replaced by substitute goods.

The government can influence the economy through its fiscal policy by making changes in the money supply.

A mixed economy is one in which ________.

________ refers to how much of a product or service people want to buy at any given time.

The ________ is the most widely used indicator of economic growth in the world today.

The government manages the supply of money through its ________.

Through the 2009 Cash for Clunkers program, the United States government offered incentives to consumers who traded in older cars for new, more fuel-efficient vehicles. This program is an example of ________.

In a planned economy, an individual's personal income dictates this or her spending choices.

Products manufactured in foreign countries by U.S. companies are included in the U.S.'s gross domestic product (GDP).

Microeconomics is the study of the behavior of the overall economies of small countries.

Change in prices is an important economic indicator because it is a measurement of consumer's purchasing power.

A(n)________ occurs when there is only one provider of a service or product and no substitutes for the service or product exist.

Mae's Country Kitchen sells out of her cinnamon rolls every morning before 8:30 a.m., and her later customers ask her to make more. The next day, Mae makes an additional two dozen cinnamon rolls and raises the price of an individual cinnamon roll by 50¢. She sells all but one of them. Mae has found the ________ price of her cinnamon rolls.

Pilar's daughter wants a Betty the Builder doll for Christmas. When Pilar gets to the toy store, they are sold out, so she goes to another store, where they tell her that they have a limited quantity, which will go on special sale at 6 a.m. the next morning and that she'd better get in line early. This is an example of which of the following determinants of demand?