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ECON 1150 Quiz 2 Review Ch 2 & 3 Questions And Answers Latest Update
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ECON 1150 Quiz 2 Review Ch 2 & 3 Questions And Answers Latest Update
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ECON 1150 Quiz 2 Review Ch 2 & 3 Questions AndAnswers Latest Update
Aggregate Demand Curve - ANS shows quantity demanded of GDP at each possible
value of the general price level
Aggregate Supply Curve - ANS shows quantity supplied of GDP at each possible
value of the general price level
Deflation - ANS a sustained decrease in the general price level
Final goods - ANS Goods and services that are consumed by their ultimate (or final)
consumer.
Inflation - ANS a sustained increase in the general price level
Intermediate goods - ANS A good that is used as an input in the production of a
final good.
Nominal Interest Rate - ANS the percentage by which the borrower pays in money
to the lender in excess to the amount borrowed
, Real Interest Rate - ANS the percentage increase in the purchasing power of the
money borrowed paid by the borrower to the lender for the privilege of borrowing
that particular monetary sum.
Real Wage - ANS : the nominal wage rate (i.e., the money price of labor) relative to
the price of goods. In other words
RW= Nominal wage/ Price level
Relative Prices - ANS the price of one good relative to another good: P1 P2
Stagflation - ANS when high inflation and high unemployment occurs at the same
time
List the three categories of inflation discussed in class and provided in our notes. -
ANS 1. Moderate Inflation 2. Galloping Inflation 3. Hyperinflation
Explain the difference between a final good and an intermediate good. - ANS A
final good is one sold to the ultimate user, whereas an intermediate good is one
that will be resold or incorporated into another good.
Explain why intermediate goods are not included in the calculations of Gross
Domestic Product. - ANS The reason why these goods are not part of the
calculation is that they would be counted twice.
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