Chapter 4 Flashcard

Front

The standard of living in an economy is best measured by

Back

output per person.

Front

In Econland total output is $7 billion, population equals 700,000 people, and, of these, 500,000 are employed workers. Output per person in Econland equals _______ and average labor productivity equals ______.

Back

$10,000; $14,000

Front

When jobs are hard to find, profits are low, few wage increases are given, and many companies go out of business, the economy is most likely in a(n)

Back

recession.

Front

If its exports are greater than its imports, then a country has a

Back

trade surplus.

Front

Major macroeconomic questions include all of the following except: Are free trade agreements beneficial? Can inflation be reduced without generating additional unemployment? What causes slowdowns in productivity growth? How do monopoly firms set prices and determine quantities to produce?

Back

How do monopoly firms set prices and determine quantities to produce?

Front

Monetary policy refers to

Back

the determination of the nation's money supply.

Front

Positive analysis

Back

aims at determining only the economic consequences of a particular policy.

Front

Aggregation means the

Back

adding up of individual economic variables to obtain economy wide totals.

Front

Before 1970 the United States generally had a trade _____ and since 1970 the United States has generally run a trade ____.

Back

surplus; deficit

Front

Decisions to reduce the money supply are made by _____ and are an example of _____ policy.

Back

the Federal Reserve; monetary