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16 Cards in this Set
- Front
- Back
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An example of a durable good would be _______________?
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a used car.
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What promotes capital deepening?
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raising taxes to pay for building roads, borrowing money from foreign nations to invest in building infrastructure in this country, and a low population growth rate at the same time that capital stock expands.
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Compared with the income approach to calculating GDP, the expenditure approach is ____________?
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more practical.
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GDP expressed in constant, or unchanging, prices is called ______________?
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real GDP.
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The main economic variables that affect business cycles include what?
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interest rates, external shocks, and business investment cycles.
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Concern about an international crisis has caused consumers to save their money and postpone big purchases. What is the effect on aggregate demand and aggregate supply?
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aggregate supply will decrease, raising the price level and lowering real GDP.
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In a typical business cycle, what stage immediately follows a peak?
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contraction.
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What is an example of a positive external shock to aggregate supply?
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good weather leads to an unusually productive harvest for corn farmers.
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What is the difference between a recession and a depression?
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a depression is a particularly deep recession with levels of unemployment.
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Higher saving leads to higher GDP in the future because _______________?
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more capital is available for investment, leading to higher output through capital deepening.
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How was the distribution of income in the US changed over the last 20 years?
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it has become less equal.
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When Alison, a college math professor, leaves her job at a small rural college and starts looking for a job at large urban university, she is ________________?
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frictionally unemployed.
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A knitting facotry worker who loses her job because the company has relocated the plant to another country is an example of __________________?
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structural unemployed.
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What might cause the inflation rate to spike up sharply?
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Prices on world oil markets rise steeply due to war in the Middle East.
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Which type of family is statistically the most likely to live below the poverty threshold?
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a black family headed by a single mother living in the inner city.
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Which type of person is most likely to be classified as "working poor"?
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Carol, a single mother who works 35 hours a week at a job that pays slightly above minimum wage.
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