MACROECONONICS MID-TERM EXAM/R.ZIEGLER




Part I Matching			

__1. Production Possibilities Frontier	
__2. Opportunity Cost		
__3. Equilibrium Price and Quantity	
__4. Circular Flow 			
__5. Net Taxes				
__6. Leakages			
__7. Injections				
__8. Law of Diminishing Marginal Returns
__9. Full Employment	
__10. Economic Growth			
__11. Economic Development		
__12. Real Flow			       
__13. Structural Unemployment		
__14. Cyclical Unemployment		
__15. Frictional Unemployment		
__16. Underemployment		
__17. Change in Demand/Supply  	
__18. Disinflation		                                 
__19. Stagflation		
__20. Invisible Hand			
__21. Laissez Faire			
__22. Economic Role of Government	
__23. Economic Functions of Government	
__24. Real GDP			
__25. Nominal GDP			
__26. Change in Quantity Demanded/Supplied

















Answers to Matching I

A. exemplified by conditions from the middle seventies, it denotes a period of high inflation simultaneous
with a recession.
B. alleges that continued investment produces reduced returns.
C. Total Taxes less Transfer Payments
D. plots the opportunity cost of production decisions.
E. amounts to approximately five percent and is equal to full employment in theory.
F. a period of lower inflation than previously experienced.
G. such factors which create disequilibrium in the circular flow model as imports, net taxes, and savings.
H. such factors which create disequilibrium in the circular flow model as exports, investments, and
government expenditures.
I. supposed to be about 5 % unemployment, it represents primarily fricitonal unemployment.
J. Adam Smith's term for market forces.
K. that portion of idled workforce attributable to a contraction in the business cycle.
L. value of the goods and services produced in an economy after adjustment for inflation.
M. additional output at existing technological levels.
N. stable economic growth, regulation of markets, redistribution of wealth.
O. attributable to a change in price effecting demand and causing movement along the curve.
P. attributable to a change in taste of consumers causing movement of the curve.
Q. taxing, spending, regulation.
R. economic activity which results out of technological advance.
S. the dollar figure of the value of goods and services produced by an economy.
T. Adam Smith is usually associated with this term meaning that the government should be as little
involved in the economy as possible.
U. results from a mismatch of skills necessary for employment and those of potential workers.
V. what must be foregone or given up to produce something else.
W. the point toward which market forces are driving the economy, and appears on the supply and demand
graph as the point of intersection of the supply and demand curves.
X. model which attempts to graphically display the major forces of the economy.
Y. occurs with persons engaged in employment for which the skills they have exceed the needs.
Z. on the circular flow model, this is represented by the designated arrows of the factors of production and
the goods and services consumed.

























Part II Matching

__1. Public Goods
__2. Marginal Propensity to Consume
__3. Disequilibrium
__4. Socialism
__5. Capitalism
__6. Supply Side Economics
__7. Corporatism
__8. Collectivism
__9. Dynamic Law of Supply and Demand
__10. Consumption Function
__11. Productivity
__12. Market Failure
__13. Demand
__14. Monad
__15. Phillips Curve
__16. Laffer Curve
__17. CPI
__18. Expected Rate of Profit
__19. Alfred Chandler
__20. Corporation
__21. Limited Life
__22. Limited Liability
__23. Social Surplus
__24. Public Sector Complex
__25. Transfer Payments
__26. Marginal Tax Rate























Answers to Matching II

A. the economic model of fascism, based on national councils of government, business, and labor which
control industries, including answers to all the basic economic questions, and is one of the reasons that it
is incorrect to say that there is actually private property in such systems.
B. originally postulated to show an inverse relationship between unemployment and inflation rates.
C. In the Visible Hand, set forth the thesis that it is middle management that really controls corporate
America.
D. Contrasts with the static rule by taking into account the elasticity of price and response of demand to it.
E. Change in expenditure divided by change in disposable income.
F. the official governmental measure of the rate of inflation.
G. actual consumption.
H. examples would include social security, unemployment, and
subsidies to farms and business.
I. depicts the inverse relationship which can occur between tax rates and revenue collection.
J. increase output per unit of input.
K. the form of business organization which makes possible greater economies of scale because of the
favorability of potential for capital accumulation.
L. began to accelerate in growth following the Great Society programs of LBJ in the 1960's.
M. characteristic of corporations which holds stockholders accountable for only the value of their stock.
N. provided by government at public expense, the use of them by one person hypothetically does not
reduce their use and availability to others.
O. a characteristic of both sole proprietorships and partnerships.
P. determines amount of tax on additional income.
Q. the 'profit' of an economy, the level of which has much to do with determining investment levels.
R. any of a number of collectivist economic programs which include collective ownership or control of the
means of production and the determination of answers to the basic economic questions, and which usually
want to redistribute wealth more equally.
S. market outcome judged to be inadequate. unacceptable, or 'unfair' in relation to some purported goal of
society.
T. an economic system in which free markets and private enterprise and private control of the factors of
production are the rule.
U. a state in which countering forces are not in balance, so that there is a tendency for change to result.
V. a broader and more useful term for any of the forms of group control over the economy, including
socialism, communism, social democracy, and corporatism and fascism.
W. school of economic thought which advocates reduction of government taxation and regulation, and
pro-active support, of market forces to promote production and economic growth and development.
X. as income rises, consumption rises, though not as quickly.
Y. anticipated profit over value of investment.
Z. in Liebniz, this represents the 'discrete particular' disassociated from its field of reference, and thereby
suffering from anomie. 





Part III Matching

__1. GDP Gap		
__2. Business Cycle		
__3. C + I + G  + Xn	
__4. Factors of Production	
__5. DPI			
__6. Discretionary Income	
__7. Autonomous Consumption	
__8. Induced Consumption	
__9. Permanent Income Hypothesis
__10. Fiscal Year		
__11. GDP Deflator		
__12. Misery Index		
__13. Full Employment GDP
__14. Keynesian Economics
__15. Aggregate Demand
__16. Dissavings
__17. Capital Goods 
__18. Externalities
__19. Alienation
__20. Anomie
__21. Keynesian Cross
__22. Regressive Tax
__23. Progressive Tax
__24. Consumption Tax
__25. Unemployment Rate
__26. Rational Expectations
























Answers to Matching III

A. Combines the unemployment rate and the rate of inflation.
B. Property Taxes and Social Security Taxes are examples of this.
C. expansion, peak, contraction, trough
D. land, labor, capital, and entrepreneurship.
E. in Liebniz theory of the monad, this is the psychological state that leads to alienation.
F. governmental budget year.
G. the difference between actual output and potential output.
H. that part of income for which real choices as to consumption and investment are possible.
I. the fundamental concern in Keynesian economics is to raise the level of this. 
J. additional consumption attributable to an increase of income.
K. on the Keynesian cross curve, this is the aggregate amount of consumption above disposable income.
L. plots expenditures for consumption against disposable income
changes about a bisecting line which shows savings and dissavings.
M. in Marxian analysis, this results from over-specialization and the expropriation of surplus value and
detachment feom the productive process, dependent on what stage of Marx's analysis you look at.
N. goods the function of which is the production of consumer goods and services.
O. from Milton Friedman, this holds that additional income will be treated by a recepient in the same way
as previous income was.
P. suggests that people act as if they will continue to see the same kind of economic conditions as they
have recently experienced.
Q. is calculated by dividing the number of unemployed persons by the workforce.
R. Japanese tax rates appear higher than ours but are not because they only tax expenditures and not
savings.
S. method for adjusting nominal value of goods and services produced to reflect the rate of inflation.
T. somewhat like 'take home pay,' it is the income available for paying the costs of living. 
U. what the value of goods and services produced would be if there was only frictional unemployment.
V. major concern is governmental policy to close the GDP gap by increasing government expenditure 
W. cost and benefit results of productive process which affect those not immediately involved in that
process.
X.  one of the ways to estimate GDP, and which suggests one of the problems with Keynesian analysis in
that it clearly shows that increasing governmental expenditure, which must come out of consumption or
investment, will not do quite what Keynes suggested it would. 
Y. the federal graduated income tax is perhaps the best example of this which places higher tax rates on
higher income levels.
Z. an amount of expenditure required for subsistence even given no income.


71-78 A
63-70 B
55-62 C
47-54 D