Exam 2: Economics and Banking

What does the consumer price index (CPI)tell us about the purchasing power of the dollar? How does it function as an economic indicator?

The government manages the supply of money through its ________.

When the supply curve and the demand curve for a single product or service are shown on the same graph,the point at which the curves intersect identifies the ________.

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.

Cyclical unemployment measures those out of work during the off-season,such as those employed in agriculture and snow-,beach-,or holiday-related industries.

Joseph took a class in macroeconomics,which means that he was studying the behavior of ________.

The ________ and the Department of Justice must review mergers between large competitors to determine whether the combined firm would be a monopolistic corporation.

The reserve requirement is defined as ________.

Mae is considering raising the price of her cinnamon rolls in order to maximize her profits.Describe the factors that will help her determine the best price for her cinnamon rolls.

Taken together,iPod and iTunes are ________.

________ is one of the countries closest to having a planned economy,and ________ is one of the countries closest to having a market economy.

According to the law of supply,the amount of a good or service supplied will increase as the price increases,and decrease as the price decreases.This direct relationship exists because ________.

Celeste is interested in studying the effects that natural disasters have on the value of goods and services in the affected areas.Her area of study should be ________.

The law of demand states that as the price for an item or service increases,so will the supply and that if the price is lower,the supply will also be less.

Population changes are a key determinant of demand for goods and services.

The Federal Reserve System (the Fed)manages the country's money supply through its monetary policy to control inflation by doing all of the following EXCEPT ________.

Define open market operations and describe how the Federal Reserve Bank uses them to control the money supply.

The main function of economics is to study ________.

Goods tracked by the PPI include ________ and ________.