Macroeconomics - Exam 2 - Review

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Across
  1. 2. The difference between the actual price a producer receives ( or producers receive) and the minimum acceptable price; the triangular area above the supply curve and below the market price.
  2. 3. The difference between GDP that is adjusted for inflation and that is not.
  3. 6. The difference between the maximum price a consumer is (or consumers are ) willing to pay for an additional unit of a product and its market price.
  4. 8. An inflation rate that exhibits resistance to change, including in response to monetary or fiscal policy shifts that would normally be expected to alter the inflation rate substantially.
  5. 13. The situation that occurs when a governmental regulatory agency ends up being controlled by the industry that it is supposed to be regulating.
  6. 14. Open market operations, discount window, and reserve requirements
  7. 15. A rise in the general level of prices in an economy; an increase in an economy’s price level.
  8. 17. The idea, that some externalities can be resolved through private negotiations among the affected parties.
  9. 19. A benefit obtained without compensation by third parties from the production or consumption of sellers or buyers.
  10. 21. The failure to use all available economic resources to produce desired goods and services; the failure of the economy to fully employ its labor force.
  11. 23. An index that measures the prices of a fixed “market basket” of some 300 goods and services bought by a “typical” consumer.
  12. 24. A good or service whose consumption increases when income increases and falls when income decreases.
  13. 25. Maximum employment and price stability
Down
  1. 1. Recurring increases and decreases in the level of economic activity over periods of years consist of peak, recession, trough, and expansion phases.
  2. 4. Financial benefit provided by a government or organization to an individual, business, or industry
  3. 5. A good or service to which excludability could apply, but that has such a large positive externality that the government sponsors its production to prevent an underallocation of resources.
  4. 7. A good or service that is individually consumed and that can be profitably provided by privately owned firms because they can exclude nonpayers from receiving the benefits.
  5. 9. high-quality, non-essential products whose demand increases disproportionately as consumer wealth rises.
  6. 10. A reduction in the total net benefit that society can obtain from its limited supply of resources.
  7. 11. The sum of consumer surplus and producer surplus.
  8. 12. The interest rate that U.S. banks and the other nonbank financial firms charge one another on overnight loans of currency held on deposit at one of the twelve Federal Reserve Banks.
  9. 16. A cost imposed without compensation on third parties by the production or consumption of sellers or buyers.
  10. 18. A problem arising when information known to one party to a contract or agreement is not known to the other party, causing the latter to incur major costs.
  11. 20. A good or service that is characterized by nonrivalry and nonexcludability. These characteristics typically imply that no private firm can break even when attempting to provide such products. As a result, they are often provided by governments, who pay for them using general tax revenues.
  12. 22. The possibility that individuals or institutions will behave more recklessly after they obtain insurance or similar contracts that shift the financial burden of bad outcomes onto others.