Final Exam Review

I am currently rewriting the review. Any of the following may change until I have removed this message!

The Final Examination has 40 multiple-choice questions. The questions on the final are taken from the textbook and the online materials. The following review is comprehensive. That means that if you see it here, you'll see it on the test. If you don't see it here, you're not responsible for it. Good luck on the final. Let me know if you have questions.

What is the best definition of economics?
Economic resources, also known as factors of production or inputs, are __.
The __ states that the individual, firm, region, or country with the lowest opportunity cost of producing a particular good should specialize in producing that good.
What are the three fundamental economic questions?
The __ states that the quantity of a good demanded in a given time period is inversely related to its price, other things constant.
The law of supply states that the quantity of a product supplied is usually __ to its price, other things constant.
Two key differences in households today relative to those in the 19^th century are that households today have __ and __.
What is the percentage of personal income that households spend on consumption, as opposed to savings or taxes?
What is gross domestic product (GDP)?
The price level in the economy is a composite measure reflecting __.
Economic growth can be illustrated by __ a production possibilities frontier.
What is convergence theory?
__ unemployment arises because of the time needed to match qualified job seekers with available job openings.
What is inflation?
What is the circular flow diagram?
Households apply all of their disposable income to __ and __.
At very low levels of real disposable income, which of the following is likely to be true about the consumption function?
What is the marginal propensity to consume?
What is the correct formula for the simple spending multiplier?
During the mid and late 1990s, the consumers in the Japanese economy __ less and __ more, resulting in __.
The __ wage measures a worker’s earnings in current dollars, or the amount on a worker’s paycheck, while the __ wage measures the wage in constant dollars, or the purchasing power of the worker’s earnings.
What is the economic short run from a macroeconomic point of view?
__ are revenue and spending items in the federal budget that automatically change with the ups and downs of the economy so as to stabilize disposable income, consumption, and real GDP. In contrast, __ requires ongoing decisions involving deliberate manipulation of government purchases, taxation, and transfers to promote macroeconomic goals such as full employment, price stability, and economic growth.
__ advocated laissez-faire, the belief that prices should be allowed to rise or fall so that the market can self-adjust to resolve expansionary or contractionary gaps. In contrast, __ argued that prices were not flexible enough for markets to self-adjust and advocated discretionary fiscal policy.
What is the medium of exchange function of money?
If a given unit of money is made of different commodities or different grades of commodity, then according to Gresham’s Law, people trade away __ money and hoard __ money.
What is the difference between M1 and M2?
If the required reserve ration is 10%, and $1 million in new deposits are made at a bank, then which of the following are true?
The quantity of money supplied is determined primarily by __ through __.
The supply of money curve has which of the following shapes?
What is the decision-making lag associated with activist policy?
What is the time-inconsistency problem?
Describe the federal budget.
A(n) __ provides guaranteed benefits for those who qualify under government transfer programs such as Social Security or Medicare.
Under the __ clause, a WTO member country must offer all other member countries the same trade concessions offered to any single member country.
One argument in favor of trade restrictions is that some countries will export products at prices below the cost of production, or the price charge in the domestic market. This practice is called __.
What is the difference between an arbitrageur and a speculator in foreign exchange markets?
Describe the time period in which the international monetary system operated on a managed float system.
What distinguishes developing countries from industrial market (developed) countries?
Why do people tend to have more children in developing countries than in industrial market countries?