Sophia (Macroeconomics) - Unit 1 Challenge 1 & 2 Latest 2022 Graded A

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Sophia (Macroeconomics) - Unit 1 Challenge 1 & 2 Latest 2022 Graded A Microeconomics involves decisions made by __________. ✔✔firms and households Studying macroeconomics helps us learn about t... he value and limitations of __________, which occurs across nations, typically involving foreign exchange transactions. ✔✔global trade In the Circular Flow model, governments __________ ✔✔produce some final goods and services Which statement below is NOT true about GDP? ✔✔It includes value from leisure. In January 2008, a bag of rice cost five million Zimbabwean dollars. Several months later, the same bag of rice cost 250 million Zimbabwean dollars. Using the price of rice for reference, the inflation rate of the Zimbabwean dollar increased by a factor of __________ in just a few months. ✔✔50 A _________ is a decline in economic activity that lasts more than a few months and is visible in _________. ✔✔recession; real GDP If the government takes on a program of increased spending and tax cuts, which combination below correctly describes these policies? ✔✔Expansionary fiscal If a central banking authority lowers interest rates in order to encourage more borrowing, which of the following combinations describes this type of policy? ✔✔Expansionary monetary Multiple theories exist about the proper role/functions of government. Many suggest that the government should promote __________, which is funded through ___________. ✔✔income redistribution; progressive taxation Almost all of the theories regarding the proper role of government suggest that it should provide __________ such as national defense. One of the most important tools the government can use to stabilize the economy is __________. ✔✔public goods; spending Which of the following choices is a form of government sponsored automatic stabilizers in the U.S.? ✔✔Progressive income tax When quantity supplied and quantity demanded are the same, a market is said to be in __________. ✔✔equilibrium When a good is unit elastic, the absolute value of the elasticity is ___________. ✔✔equal to one Minimum wage is a type of __________ that enforces a lower limit on wages. When these occur, they create a __________ of labor, because there are more people who want to be paid at this rate than there are firms that are willing to pay them. ✔✔price floor; surplus In 2007, the government attempted to end inflation by enforcing a price freeze on basic commodities such as corn, sugar and eggs. This led to runs on grocery stores and other places that sold such items, since in some cases the prices were rolled back to almost 50% of what they had been. A shortage occurred because people rushed to stock up on these items as much as they could. In this example, the freeze on prices is known as a government enforced __________, with businesses forbidden to charge more than the price set by the government. These government enforced price constraints are binding because they are lower than the __________. ✔✔price ceiling; equilibrium price If a price floor is set below the equilibrium price (P) above, which of the following will occur? ✔✔Nothing, as this price floor would not be binding. What happens on a graph for a good when a tax is imposed? ✔✔The supply curve shifts to the left. The price for borrowing money is known as the __________. ✔✔interest rate Unemployment as a result of people's skills not matching those needed for jobs in a changing economy is known as __________ unemployment. ✔✔structural Jim can't find a job because the store where he was manager just closed due to a recession. What type of unemployment does this represent? ✔✔Cyclical When a domestic currency depreciates, what happens to the purchases of imports and exports? ✔✔Imports decrease and exports increase. Which of the following is a reason why the aggregate demand curve slopes downward? ✔✔Interest rate effect If the demand for a country's currency increases, what happens to the currency? ✔✔It will appreciate. When the Current Account and the Capital Account are added together, __________. ✔✔the sum will be zero [Show More]

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