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Econ 231 Final Exam || with 100% Correct Answers.
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  • Econ 231

Automatic Stabilizers correct answers feature of the economy that reduces our sensitivity to shock. (1) fiscal policy-adjusting government spending and/or taxes in order to stabilize unemployment and inflation, (2) monetary policy-adjusting the availability and /or cost of credit in order to...

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  • August 16, 2024
  • 8
  • 2024/2025
  • Exam (elaborations)
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  • automatic stabilizers

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  • Econ 231
  • Econ 231

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Econ 231 Final Exam || with 100% Correct Answers.
Automatic Stabilizers correct answers feature of the economy that reduces our sensitivity to
shock.

(1) fiscal policy-adjusting government spending
and/or taxes in order to stabilize unemployment and inflation,
(2) monetary policy-adjusting the availability and /or cost of credit in order to stabilize
unemployment
and inflation,
(3) progressive tax- as income increases, the tax rate increases,
(4) transfer payments,
(5) unemployment insurance program. correct answers List of Automatic Stabilizers

fiscal policy correct answers adjusting government spending
and/or taxes in order to stabilize unemployment and inflation

monetary policy correct answers adjusting the availability and /or cost of credit in order to
stabilize unemployment
and inflation

progressive tax correct answers as income increases, the tax rate increases

profit correct answers Producers are motivated by

More Output correct answers As prices rises producers produce ___________

Price - cost per unit correct answers Profit per unit =

Aggregate Supply Curve correct answers relationship between price level and the quantity of real
gdp supplied

The better it is for the consumer correct answers Who is it better for if there is more
competition.?

produce more correct answers Anytime cost goes down, business will ______________?

Productivity correct answers is the amount of output produced by individual workers.

Stagflation correct answers is inflation and unemployment going up at the same time

borrowers and savers. correct answers The credit market matches ______________?

Debtors or borrowers correct answers are economic agents who borrow funds?

Creditors correct answers refers to loans that the debtor receives

, The interest rate correct answers is the cost of a one dollar loan. Money paid to borrow money.
Money received from an investment.

Credit demand curve correct answers is the schedule that reports the relationship between the
quantity of credit demanded and the real interest rate.

Middlemen, matching savers and borrowers. correct answers Banks play the role of

The credit market correct answers is where borrowers obtain funds from savers

excess reserves. correct answers Banks can only lend their _______________?

Official bank reserves correct answers consist of vault cash and deposits at the Federal Reserve
Bank

Assets = Liabilities + Owners' Equity(Stockholders Equity) correct answers Banks use the
accounting equation to balance their books

Securities correct answers are financial contracts.

Demand deposits(checking accounts) correct answers are funds that depositors can access on
Demand.

(1) identify profitable lending opportunities, (2) transform short-term liabilities into long-term
investments, (3) manage risk correct answers Banks do the following three things:

Maturity correct answers refers to the time until debt must be repaid.

insolvent correct answers A bank becomes ________________ when the value of the bank's
asses is less than the value
of its liabilities.

solvent correct answers A bank is ______________ when the value of the bank's assets is greater
than the value of its liabilities

Credit correct answers is essential for the efficient allocation of resources in the economy.

Borrowing correct answers Firms, households, and governments use the credit market for
______________?

aggregate demand correct answers The nation's money supply is an important determinant of
______________

Money Supply correct answers the total spendable dollars in circulation

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