Macro Eco Final Exam Jeopardy

What is deadweight loss from Taxes?

A wedge

How do you calculate the size of a tax impact?

T x Q

What is the effect of taxes on inelastic demand?

Less impact of a tax

What is the curve called that predicts the impact of additional taxes?

Laffer’s Curve

Who used the supply-side economics in office?

Ronald Reagan

What would create greater deadweight loss?

Elastic Demand

What do we call the prevailing price from imported products?

World Price

What is the tax on imported good called?

Tariff

Who are possible losers with imported goods?

Domestic producers.

What is the term we use for the supply and demand domestically without trade?

Equilibrium without trade

What is one of the arguments against import trade?

Infant industry

What do we call a trade agreement between two countries?

Unilateral

What is the abbreviation for Gross Domestic Product?

GDP

What does GDP measure?

Income and expenses

What is Net Exports?

Consumption, investments, government purchases, imports

What is nominal GDP adjusted to a base year?

Real GDP

What is the formula for the GDP deflator?

(Nominal GDP / Real GDP) * 100

What is GDP?

Measure of economic well-being

What is the abbreviation for the Consumer Price Index?

CPI

What is the usual relation ship of the real interest rate to the nominal interest rate?

Usually lower than the nominal interest rate

What is one of the issues with calculating the CPI?

Substitution bias

What is the formula for calculating the inflation rate using CPI?

((CPI2 – CPI1) / CPI1) * 100;

What is one of the uses for the COLA?

Used to adjust social security

What was Babe Ruth’s salary adjusted for inflation?

80k and 1.2m

What is an attribute of productivity?

Technological knowledge

What is one of the determinants of Productivity?

Physical capital per worker

What is Technological Knowledge?

The best way of producing a good

What is diminishing returns?

Next unit of input productivity declines

What is Principle 1 – people face trade-offs?

Savings/Investment trade-off

What happens when a country invests in another?

Improves the foreign well-being