Real wage is the wage of a worker adjusted for inflation, representing the purchasing power of the income.

Real wage is the total amount of money a worker earns before taxes.

Real wage is the wage paid in foreign currency.

Real wage is the wage received as bonuses only.

Define: Potential output.

Potential output is the level of output an economy can produce at a constant inflation rate when utilizing all resources efficiently.

Potential output is the maximum profit a firm can earn in a competitive market.

Potential output is the total value of exports minus imports in an economy.

Potential output is the amount of goods and services produced when unemployment is at its highest.

Define: Short-run equilibrium.

Short-run equilibrium is the point where aggregate demand equals short-run aggregate supply.

Short-run equilibrium is the point where aggregate supply equals long-run aggregate supply.

Short-run equilibrium is the point where aggregate demand equals potential output.

Short-run equilibrium is the point where aggregate demand is less than aggregate supply.

Define: Long-run equilibrium.

Long-run equilibrium occurs when aggregate demand equals long-run aggregate supply and the economy is at full employment.

Long-run equilibrium occurs when aggregate demand is less than aggregate supply and unemployment is high.

Long-run equilibrium occurs when aggregate demand exceeds aggregate supply and inflation is rising.

Long-run equilibrium occurs when the economy is experiencing a recession and output is below potential.

Define: Long-run aggregate supply (LRAS) curve.

The long-run aggregate supply (LRAS) curve shows the relationship between the price level and the quantity of output after all prices and wages have adjusted.

The long-run aggregate supply (LRAS) curve shows the relationship between government spending and interest rates in the long run.

The long-run aggregate supply (LRAS) curve shows the relationship between the unemployment rate and inflation in the short run.

The long-run aggregate supply (LRAS) curve shows the relationship between the money supply and exchange rates.

Define: Adverse supply shocks.

Adverse supply shocks are unexpected events that decrease the supply of goods and services, raising prices and reducing output.

Adverse supply shocks are government policies that increase the demand for goods and services, lowering prices.

Adverse supply shocks are planned events that increase the supply of goods and services, raising output and lowering prices.

Adverse supply shocks are unexpected events that increase consumer income, boosting demand and output.

Hysteresis in economics refers to the long-lasting effects of past economic events, such as unemployment remaining high even after a recession ends.

Hysteresis is the process by which inflation rates are determined solely by current monetary policy.

Hysteresis describes the immediate recovery of an economy after a downturn, with no lasting effects.

Hysteresis refers to the tendency of prices to decrease rapidly after a period of inflation.

Define: Contractionary fiscal policy.

Contractionary fiscal policy is a type of fiscal policy that involves decreasing government spending or increasing taxes to reduce the level of aggregate demand and control inflation.

Contractionary fiscal policy is a type of fiscal policy that involves increasing government spending or decreasing taxes to boost aggregate demand and stimulate economic growth.

Contractionary fiscal policy is a monetary policy tool used by central banks to lower interest rates and encourage borrowing.

Contractionary fiscal policy is a policy that aims to increase exports and reduce imports to improve the balance of trade.

Define: Classical economists.

Classical economists are a group of economists in the 18th and 19th centuries who believed that free markets regulate themselves when free of any intervention.

Classical economists are modern-day economists who focus on digital currencies.

Classical economists are a group of scientists who study classical music.

Classical economists are government officials who regulate international trade.

Define: American Recovery and Reinvestment Act.

The American Recovery and Reinvestment Act was a stimulus package enacted by the U.S. Congress in 2009 to help the economy recover from the Great Recession.

The American Recovery and Reinvestment Act was a trade agreement between the U.S. and Canada signed in 2009.

The American Recovery and Reinvestment Act was a healthcare reform law passed in 2009.

The American Recovery and Reinvestment Act was a military alliance formed in 2009.

Define: Federal budget.

A federal budget is a financial document that outlines the government's projected revenue and spending for a specific period, usually a year.

A federal budget is a list of all the states in a country.

A federal budget is a document that only records the salaries of government employees.

A federal budget is a plan for private companies to manage their profits.

Define: Budget resolution.

A budget resolution is a legislative measure that sets the framework for government spending and revenue levels for a fiscal year.

A budget resolution is a law that directly allocates funds to specific government programs.

A budget resolution is a document that outlines the President's personal financial plan.

A budget resolution is a report detailing the previous year's government expenditures.

Define: Continuing resolutions.

Continuing resolutions are temporary funding measures that allow the government to continue operating when the formal appropriations process has not been completed.

Continuing resolutions are permanent laws that replace the Constitution.

Continuing resolutions are annual reports on government spending.

Continuing resolutions are emergency declarations for natural disasters.

Define: Entitlement programs.

Entitlement programs are government programs that provide benefits to individuals who meet certain eligibility requirements, such as Social Security or Medicare.

Entitlement programs are private organizations that offer financial aid to businesses only.

Entitlement programs are government initiatives that only provide benefits during natural disasters.

Entitlement programs are voluntary community services run by non-profit organizations.

Define: Annually balanced budget.

An annually balanced budget is a budget in which government revenues and expenditures are equal each year.

An annually balanced budget is a budget where expenditures always exceed revenues every year.

An annually balanced budget is a budget that is only balanced over a period of five years.

An annually balanced budget is a budget that allows for unlimited government spending each year.

Define: Cyclically balanced budget.

A cyclically balanced budget is a budget policy that aims to balance the budget over the course of an economic cycle, rather than every year.

A cyclically balanced budget is a budget that is always in surplus regardless of the economic cycle.

A cyclically balanced budget is a budget that is always in deficit regardless of the economic cycle.

A cyclically balanced budget is a budget that ignores economic cycles and focuses only on annual balance.

Define: Functional finance.

Functional finance is an economic theory that government should finance itself to meet explicit goals, such as full employment, rather than to balance the budget.

Functional finance is a theory that advocates for minimal government intervention in the economy.

Functional finance is a policy that focuses on reducing government spending to achieve a balanced budget.

Functional finance is an approach that prioritizes tax cuts over public investment.

Define: Crowding out.

Crowding out is an economic concept where increased government spending leads to a reduction in private sector investment.

Crowding out is a situation where private investment increases due to government subsidies.

Crowding out refers to the process of increasing exports by reducing imports.

Crowding out is when government spending leads to higher employment in the private sector.

Crowding in is an economic concept where increased government spending leads to an increase in private sector investment.

Crowding in is a situation where government spending reduces private sector investment.

Crowding in refers to a decrease in overall economic activity due to government intervention.

Crowding in is when private investment is completely replaced by government spending.

Define: Sequestration.

Sequestration refers to automatic, across-the-board spending cuts in the federal budget if certain budgetary goals are not met.

Sequestration refers to the process of increasing government spending to stimulate the economy.

Sequestration refers to the appointment of a special committee to review federal budget proposals.

Sequestration refers to the elimination of all federal taxes for a fiscal year.

Define: National debt.

National debt is the total amount of money that a country's government has borrowed, typically through issuing securities.

National debt is the total value of goods and services produced in a country in a year.

National debt is the amount of money individuals owe to private banks.

National debt is the total amount of money a country lends to other nations.

Define: Debt ceiling.

The debt ceiling is a legislative limit on the amount of national debt that can be incurred by the U.S. Treasury.

The debt ceiling is the maximum interest rate the government can charge on loans.

The debt ceiling is a limit on the amount of money individuals can borrow from banks.

The debt ceiling is a cap on the annual federal budget deficit.

Define: Double coincidence of wants.

Double coincidence of wants is a situation in barter systems where two parties each possess an item the other wants, enabling an exchange.

Double coincidence of wants refers to a situation where only one party wants what the other has, making exchange impossible.

Double coincidence of wants is when two parties exchange goods using money as a medium.

Double coincidence of wants is a situation where goods are exchanged for services only.

Define: Commodity money.

Commodity money is money whose value comes from a commodity of which it is made, such as gold or silver coins.

Commodity money is digital currency that exists only in electronic form.

Commodity money is money issued by private companies and not backed by any physical asset.

Commodity money is a type of money that can only be used within a specific country and has no intrinsic value.

Macroeconomics ECO 210 Final Exam Study Guide

Quiz

•

Other

•

University

•

Practice Problem

•

Hard

Kaden Benjamin

FREE Resource

100 questions

Show all answers

1.

OPEN ENDED QUESTION

3 mins • 1 pt

Define: Consumption function.

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2.

OPEN ENDED QUESTION

3 mins • 1 pt

Define: Marginal propensity to consume (MPC).

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3.

OPEN ENDED QUESTION

3 mins • 1 pt

Define: Marginal propensity to save (MPS).

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4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Define: Net wealth.

Net wealth is the total value of all assets owned by an individual or household minus all liabilities or debts owed.

Net wealth is the total income earned by an individual in a year.

Net wealth is the amount of cash available at any given time.

Net wealth is the total value of all debts owed by an individual or household.

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Define: Life-cycle model of consumption and saving.

The life-cycle model of consumption and saving suggests that individuals plan their consumption and savings behaviour over their life-cycle to smooth consumption.

It states that individuals only save during their retirement years and spend all their income during their working years.

It proposes that consumption and saving decisions are made randomly without any planning for the future.

It suggests that individuals increase their consumption every year regardless of their income.

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Define: Aggregate expenditure line.

The aggregate expenditure line shows the total amount of spending in an economy at different levels of income.

The aggregate expenditure line shows the total amount of savings in an economy at different levels of income.

The aggregate expenditure line shows the total amount of taxes collected in an economy at different levels of income.

The aggregate expenditure line shows the total amount of exports in an economy at different levels of income.

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Define: Income-expenditure model.

The income-expenditure model is a macroeconomic model that shows the relationship between total income and total spending in the economy.

The income-expenditure model is a microeconomic model that explains consumer preferences.

The income-expenditure model is a financial accounting tool for businesses.

The income-expenditure model is a model that predicts stock market trends.

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Macroeconomics ECO 210 Final Exam Study Guide

100 questions

Define: Consumption function.

Define: Marginal propensity to consume (MPC).

Define: Marginal propensity to save (MPS).

Define: Net wealth.

Define: Life-cycle model of consumption and saving.

Define: Aggregate expenditure line.

Define: Income-expenditure model.

Define: Simple spending multiplier.

Define: Nominal wage.

Define: Real wage.

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