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How is potential GDP related to the price level
How is potential GDP related to aggregate supply?
How is the aggregate supply curve related to the price level
What happens to aggregate supply when potential GDP increases
How is aggregate demand related to the price level
The Buying Power of Money (Quantity demanded of AD)
Real Interest Rates (Quantity demanded of AD)
The Real Prices of Exports and Imports (Quantity demanded of AD)
What are the Three things that happen when Price Level Changes on the quantity demanded of AD
How is the price level related to the buying power of money?
How does a change in government expenditure affect the aggregate demand curve?
If the economy is at macroeconomic equilibrium, how does real GDP compare to potential GDP
What could cause cost-push inflation to occur
What is fiscal policy and what are its main objectives
What are the three possible states that a government budget can be in?
Budget Balance
Automatic Stabillizers
Structural Surplus or Deficit
What are the supply-side effects of a change in taxes on labor income?
Tax Wedge
The Crowding Out Effect
What is Discretionary Policy
What 4 things do the government use for discretionary policy
Government Expenditure Multiplier
Tax Multiplier
Transfer Payment Multipliers
Balanced Budget Multiplier
How does a change in income taxes affect aggregate demand and aggregate supply
To what does the phrase ‘output gap’ refer
In the United States, who controls monetary policy?
What is the federal funds rate
What is the opportunity cost of the Federal Funds Rate
When the Fed buys or sells U.S. government securities, what happens to the federal funds rate
In the short run, what happens when the Fed increases the federal funds rate
In the long run, what determines the real interest rate
If the Fed changes the federal funds rate, what happens to AD, real GDP, and the price level
What is the main problem in pursuing monetary policy
What do economists call the proposal to keep the quantity of money growing at a slow constant rate (Milton Friedman)
How does the k Percent Rule work
What fundamental force generates international trade
Comparative Advantage
What situation would cause a country to export a good
Who gains, who loses, and what are the relative sizes of the gains and losses when a country exports a good
Tariff
Who gains because of a tariff and why (Quantity Demanded and Supplied)
Import Quota
Who benefits from an import quota but not from a tariff
(Supply and Demand)
What are three arguments against International Trade
What is the national security argument for trade restriction?
Infant Industry Argument
Dumping Argument
What do economists call the record of international receipts and payments
Current Account
What is the U.S. current account and what does it record
What is the U.S. Capital and Financial account and what does it record
What is the official settlements account and what does it record
What makes a country a debtor nation
What is the foreign exchange rate
What factors are used to show the quantity of U.S. Dollars that traders plan to buy during a given time period
The demand of for dollars is a derived demand. Why do do people demand dollars
If the exchange rate rises, what happens to the quantity of dollars demanded
To what does the phrase "purchasing power parity" refer?
