| FALSE | Percent Change in (Q/L) = (Percent Change in Q) - (Percent Change in P). |
| Total GDP/Total Population | GDP Per Capita |
| Good Economic Model | Accurately describes historical outcomes, and It must make reasonable predictions about the results of future observations. |
| FALSE | Cartesian coordinate system is not the usual graphical representation. |
| Elasticity | _________ represents a combination of percentage change and marginal analysis. |
| Unemployment Rate | Is the number of unemployed individuals divided by the total of those employed and unemployed total labor force. |
| TRUE | Percent Change in (P x Q) = (Percent Change in P) + (Percent Change in Q) |
| Empirical Study | The test of a proposition or theory using actual observations or numbers is called _______. |
| Positive | __________ is also referred to as a direct relationship. As the value of X increases, the value of Y increases. |
| Depression | A recession that is major both in scale and duration. |
| TRUE | Percentage of Change = ending value- starting value /starting value x 100. |
| TRUE | Understanding measures of Elasticity is critically important in Microeconomics, references to Elasticities are infrequent in Macroeconomics |
| TRUE | Macroeconomics is analysis of the behavior of an economy as a nation. |
| FALSE | Political Science is the study of mankind in the ordinary business of life. |
| Empirical Study | The test of a proposition or theory using actual observations or numbers is |
| Real GDP | What is the value of total output (nominal GDP) corrected for any changes in prices. |
| A period of decline in total output, income, employment, and trade, usually lasting from six months to a year. | Recession is |
| Marginal analysis | ___________ relates to the effect that a small or unit change one variable has on another variable. |
| Imports | Consumer Price Index (CPI) includes |
| Marginal change | _________ is a very small increase of decrease in the quantity of some variable. |
| Right | Independent variable can be seen in the _______________ of the equation. |
| Other things being equal | Ceteris paribus, means |
| Curve | A line showing X and Y pair is referred as ____________. |
| TRUE | Common characteristics in each of the relationship of two variables is that the change in independent variable X produces a change in dependent variable Y and represented in a math equation. |
| The change in the physical output of an economy, typically measured as the change in Real GDP. | Economic growth is |
| TRUE | One of the Macroeconomic objectives is to develop better laws and government policies to maximize welfare of the society. |
| Equilibrium | A market is in ______________ when the quantity demand is equal to quantity supplied at the market price. |
| Competitive Free Market | __________ is when many suppliers and many consumers engaged in trade without interference from government. |
| Change on Quantity Supplied | ______________ is a movement along a fixed supply curve in response to a change in the price of that good, ceteris paribus (everything else unchanged). |
| Equilibrium Price | __________is the price at which the quantity demanded is equal to the quantity supplied. Other things being unchanged, there is no tendency for this price to change. |
| Smith | According to __________, that if more of the time is spent in one activity then you must invest your resources to develop specialized tools or machines to aid me in my task. |
| Law of Demand | __________as the price of a good or services increases, the quantity you would be willing and able to purchase during some period of time declines. |
| Price Ceiling | ___________ is a legal requirement that maintains the market price below the equilibrium price. |
| Change in Supply | __________as the shift of the supply curve in response to a change in one of the variables assumed to be held constant under the ceteris paribus assumption (e.g., technology), holding the good's price constant. |
| The correct answers are: _________ simcard., 1/2 | Compute the opportunity cost , where 10 mobile phones is to 5 Simcards. |
| Barter | The fundamental method of exchange is ____________. |
| Shortage | ___________is the amount that the quantity demanded exceeds the quantity supplied when the market price is below the equilibrium price. |
| Positive sum game | ____________ is when we specialize and both benefit after the exchange |
| Absolute | __________ is an advantage of a person who can produce a good or service with fewer resources than another person. |
| Increase in demand | In Demand Curve Shifts, a change in any of these will cause the demand to curve shift to the right or left, when the demand curve is shifting to the right. The rightward shift is called ___________________. |
| Production Possibilities curve | ____________ a graph that indicates all possible combinations of two goods or services that can be produced within an economy given the full and efficient use of all available resources. |
| Comparative advantage | ___________if a person can produce a good or service with lower opportunity cost than can another |
| Everything else unchanged | Law of Demand Ceterus Paribus |
| General Purchasing Power | ______________ is the characteristic of money or currency where it can be used as a medium of exchange for any good or service. |
| Increase Opportunity Cost | ___________, as more scarce resources are used to increase production of one good or service, production of another good or service falls by larger and larger amount. |
| Dependent variable | __________ a variable that depends on the value of the independent variable(s) can be seen in the left side of the equation. |
| Price Floor | ___________ a legal requirement that maintains the market price above the equilibrium price. |
| Purchasing Power | Quantity of goods and services that can be purchased with a given amount of money. |
| Surplus | __________is the amount that the quantity supplied exceeds the quantity demanded when the market price is above the equilibrium price. |
| Intercept | The point where the curve crosses the vertical axis is referred as ____________. |
| Law of Supply | ___________ as the price of a good or service increases the quantity you would be willing and able |
| Frontier | The production possibilities curve is often referred to as a ___________. |
| Macroeconomics | Analysis of the behavior of an economy as a whole. |
| Relative | Microeconomic demand and supply curves depend on differences in ________ prices |
| Services | Intangible but useful activities that are valued by people. |
| Demand curve | The _______ is a graphic representation of the market demand schedule and the Law of Demand |
| Change in Demand | A shift of the demand curve in response to a change in one of the variables assumed to be held constant under the ceteris paribus assumption (e.g., income), holding the good's price constant. |
| Surplus | When the amount that the quantity supplied exceeds the quantity demanded when the market price is above the equilibrium price |
| Ceteris Paribus | ______ Latin term that used in economics means all other non-price factors that affect the amount we consume or produce do not change. |
| Inflation Rate | Percentage increase in the average level of prices. |
| Nominal Gross Domestic Product (GDP) | The market value of final goods and services (i.e., sold to final consumers) produced by a nation during a specific period, usually 1 year. |
| Goods | Tangible things that satisfy people's wants and desires. |
| Equilibrium | A market is in _______ when the quantity demanded is equal to quantity supplied at the market price. |
| Market | A _______is a collection of suppliers and consumers engaged in trade. |
| Shortage | When the amount that the quantity demanded exceeds the quantity supplied when the market price is below the equilibrium price. |
| Demand schedule | We can represent a single person's decision about how many items to purchase over a year in a table called a _______. |
| Economic Goods and Services | Goods and services those are scarce. There is an opportunity cost involved in their use or consumption. |
| Deflation Rate | Percentage decline in the average level of prices. |
| Normal Good | An increase in income leads to an increase in demand (the demand curve shifts to the right). |
| Inferior Good | An increase in income leads to a decrease in demand (the demand curve shifts to the left). |
| Free Goods | Things that are available in sufficient amounts to satisfy all possible needs. There is no opportunity cost involved in their use or consumption. |
| Competitive Free Market | When many suppliers and many consumers (competitive) engaged in trade without interference from government (free). |
| Recession | A period of decline in total output, income, employment, and trade, usually lasting from six months to a year. |
| Nominal Gross Domestic Product (GDP) | __________________ - the market value of final goods and services (i.e., sold to final |
| consumers) produced by a nation during a specific period, usually 1 year. |
| Expenditure approach | What approach that measures total economic activity by adding the amount spent by allultimate or final consumers of products and service? |
| Purchasing Power | ___________is the quantity of goods and services that can be purchased with a given amount of money; the value of money |
| Price Index | __________is the measure of the average level of prices for some specified bundle of goods and services, relative to the prices in a specified base year |
| Deflation | When the average level of prices declines, this is called _________. |
| TRUE | GDP Deflator = Nominal (current-dollar) GDP /Real (constant-dollar) GDP * 100 |
| TRUE | Price Index = current-year total cost of market basket of goods and services / base-year total cost of market basket of goods and services |
| FALSE | Deflation Rate = Price Index Year 2 - Price Index Year 1 /Price Index Year 1 * 100 |
| TRUE | Net Domestic Product (NDP) = C + In + G + NX = GDP - depreciation |
| Non Renewable Natural Resources | What kind of resources in which examples are petroleum, natural gas, coal, and nonfuelminerals extracted from the ground is included in GDP in the products produced from them |
| GDP | Transfer Payment - a payment made for which no goods or services are provided in return. Transfer payments are excluded from _______. |
| TRUE | Real GDP - value of total output corrected for any changes in prices. Also referred to as "constant-dollar" GDP. |
| Real GDP is reported quarterly by the Bureau of Economic Analysis |
| Pushed Prices | When the price of resources in the production process increases, firms try to pass on these increases to the product price this is called ________. |
| TRUE | The GDP Deflator is described as a variable-weight price index (also referred to as a Paasche price index) |
| Nominal Gross National Product (GNP) | _____________________- the market value of final goods and services produced by labor and property supplied by the residents of a nation during a specific period, usually 1 year. |
| Value Added | ____________________the amount by which the value of a firm's finished products exceeds the value of goods and services the firm purchases |
| FALSE | When the government increases money supply faster than the economy is growing you generally end up with deflation. |
| Inflation Rate | __________- percentage rate of increase in the price index per period. |
| Menu costs | ________ represent a cost to not only individuals but also the macroeconomy or reduce overall economic efficiency in that they represent an unnecessary cost of transforming resources into final goods and services. |
| GDP Deflator | ___________ is also known as the Implicit GDP Deflator or Implicit Price |
| CPI or Consumer Price Index | __________ is described as a fixed-weight price index (also referred to as a Laspeyres price index), which measures the cost of a fixed basket of goods relative to a base period |
| Price Ceiling | A legal requirement that maintains the market price below the equilibrium price. |
| Supply curve | The __________ is a graphic representation of the market supply schedule and the Law of Supply |
| Nominal Gross National Product (GNP) | The market value of final goods and services produced by labor and property supplied by the residents of a nation during a specific period, usually 1 year. |
| Microeconomics | Analysis of the behavior of individual decision-making units (individuals, households, firms). |
| Nominal Interest Rate | The market interest rate that is paid by borrowers to lenders. |
| Price floor | A _______ is the opposite situation of a price ceiling. |
| Business Cycle | Recurrent, systematic fluctuations in the level of business activity, often characterized by changes in growth rate of real GDP. |
| Productivity | ______________ - average output per hour of labor (e.g., total real GDP divided by the total number of labor-hours worked) |
| Inflation | When the average level of prices increases over time the economy is said to be experiencing _______________. |
| Underground economy | ____________consists of transactions that are not documented for various reasons. |
| Hyperinflation | ___________ is a term used to denote a very high rate of inflation. |
| Leisure time | What do you call the hours (not rendered) beyond government mandated 40 hour work week |
| Real wage | ___________ is nominal wage corrected for the average level of prices. |
| Natural Rate of Unemployment | _____________ unemployment arising from frictional, structural, and seasonal unemployment, further as described as the unemployment rate that coexists with macroeconomic stability. |
| Unemployment Rate | ___________ = (Number Unemployed / Labor Force) * 100 |
| TRUE | Labor is a service that is supplied by individuals and demanded by firms. |
| TRUE | Unemployment Rate (percent) = Unemployed/Total Labor Force * 100 |
| TRUE | Hyperinflation is generally caused by governments printing money to finance large fiscal deficits caused by wars, revolutions, the establishment of new states, or exorbitant social programs. |
| FALSE | Production Costs = opportunity costs of resources required (e.g., cash costs) to change prices. |
| FALSE | Structural Unemployment - dynamic labor force in a stable economy with imperfect information. |
| Labor Demand Curve | ___________ is the amount of labor demanded by firms at a given real wage rate. |
| Participation Rate | ___________ = Labor Force / Civilian Non institutional Population * 100 |
| TRUE | Demand-Pull Inflation - caused by an increase in aggregate demand for goods and services. |
| TRUE | GDP Deflator = Nominal GDP/Real GDP x 100 |
| TRUE | Civilian Non institutional Population - persons 16 years of age and older who are not inmates of institutions |
| TRUE | Deflation = Decrease in average level of prices |
| TRUE | Consumer Price Index=Only goods and services purchased by households included Quantities fixed (the market basket) Imports (of consumer goods) included. |
| TRUE | Another problem with the unemployment rate as a measure of overall labor activity is that the employed may not be working as much as they would like |
| TRUE | Cost-Push Inflation - caused by an increase in the costs of production of goods and services. |
| Cynical | __________ Unemployment is associated with business cycles and, more particularly, with temporary downturns in the economy |
| Full Employment Output | _________ is the level of output at which the labor market is at its natural rate of unemployment. |
