ECONTWO First Term

Full employment means 100% of the country's population must have a job.

Underemployment means

1. the skills of workers do not fit their current job
2. working less than 12 hours a day

It is the value of goods produced in foreign countries plus the foreign investments.

Net export is

1. the same as Balance of Trade.
2. import minus export.

Factor Income Approach of measuring GDP is inaccurate since most of the businesses understate their financial statements.

If marginal propensity to consume is 0.6, then marginal propensity to save is ____.

Value added is the increase in value in a finished product after undergoing processing and transformation using various factor inputs.

Households' demand for final goods and services for their current satisfaction is called _______.

Includes construction, durable equipment and changes in stocks.

Household consumption expenditure is based on their disposable income and not only on total personal income. Disposable income is total personal income less income taxes. Thus, a higher level of taxes will lead to a higher level of consumption expenditure.

Marginal propensity to consume is changes in consumption per given changes on disposable income.

In 2 sector economy, this is the minimum consumption given that you don't have a disposable income.

Tariffs and value added taxes are examples of ad valorem tax.

Public good is a service, when consumed by an individual, does not exclude others in enjoying the same service.

Multipliers can be derived from the partial of Aggregate Output with respect to Consumption only.

The estimation of national income based on the income received by various owners of productive inputs regardless which productive sector they were earned.

A simple economy is in equilibrium when its overall production is matched by aggregate demand for the primary goods and services.

A multiplier is a number that measures the change in national income due to changes in autonomous expenditures.

The primary role of the government is to provide services. To provide such services, the government collect tax.

In industrial origin approach, GDP = GVA of Agricultural sectors + GVA of Industrial sector + GVA of Service sectors + GVA on final goods.

where GVA = Gross Value Added

Which of the following will cause the short-run aggregate supply curve to shift to the right?

Which of the following will cause the real interest rate to decrease in the loanable funds market?

An economy is facing moderate output growth but significantly high inflation rates. The Federal Reserve can undertake which of the following policy actions to address the problem?

Which of the following government policies is most likely to lead to an increase in long-run economic growth?

If the United States dollar depreciates in the foreign-exchange market, which of the following will occur?