Macroeconomics Test Review Guide
• Scarce goods have positive market prices.
• An increase in money supply causes inflation. (positive statement).
• Government budget deficits are higher during recessions. When the government spends more than it collects in revenues, recessions result. (association by causation).
• Macroeconomics is the study of nation and global economics without assuming individuals are rational.
• Increase in the income of consumers would result in an increase in the equilibrium price of iPods.
• A market allocation system leads to the increase of the quantity and quality of goods offered for sale.
• First come first serve wastes resources in an attempt to be first.
• Barter exchanges require double conscious of wants and involve higher transaction costs than monetary exchanges.
• The double conscious of wants is eliminated by the use of money.
• The law of demand states that as price increases, quantity demanded decreases.
• Inferior goods are purchased during recession.
• A rightward shift in the demand curve for automobiles would result from an increase in the value of household stock portfolios
• Items with same input: increase in price of one leads to decrease in the supply of the other.
• Decrease in equilibrium price of butter caused from a decrease in the price of margarine (complementary good)
• Leftward shift in the demand curve for automobiles results from an increase in the price of steel and an input in production.
• “Since a household cannot afford to keep adding indefinitely to its debt, a country cannot afford to do so either.” The fallacy of composition.
• Price ceiling of $3 per gallon on gas would lead to long lines and a black market or higher secondary price for gasoline.
• Minimum wage is an example of market intervention. A minimum wage is a price floor that can result in unemployment.
• Market systems: command or planned economies experienced both surpluses and shortages of goods and services.
• Those with the most and
• An increase in money supply causes inflation. (positive statement).
• Government budget deficits are higher during recessions. When the government spends more than it collects in revenues, recessions result. (association by causation).
• Macroeconomics is the study of nation and global economics without assuming individuals are rational.
• Increase in the income of consumers would result in an increase in the equilibrium price of iPods.
• A market allocation system leads to the increase of the quantity and quality of goods offered for sale.
• First come first serve wastes resources in an attempt to be first.
• Barter exchanges require double conscious of wants and involve higher transaction costs than monetary exchanges.
• The double conscious of wants is eliminated by the use of money.
• The law of demand states that as price increases, quantity demanded decreases.
• Inferior goods are purchased during recession.
• A rightward shift in the demand curve for automobiles would result from an increase in the value of household stock portfolios
• Items with same input: increase in price of one leads to decrease in the supply of the other.
• Decrease in equilibrium price of butter caused from a decrease in the price of margarine (complementary good)
• Leftward shift in the demand curve for automobiles results from an increase in the price of steel and an input in production.
• “Since a household cannot afford to keep adding indefinitely to its debt, a country cannot afford to do so either.” The fallacy of composition.
• Price ceiling of $3 per gallon on gas would lead to long lines and a black market or higher secondary price for gasoline.
• Minimum wage is an example of market intervention. A minimum wage is a price floor that can result in unemployment.
• Market systems: command or planned economies experienced both surpluses and shortages of goods and services.
• Those with the most and