ECO 4223 Exam 1 Actual Study
Guide (Questions with Verified
Answers) Already Graded A+ |
Latest Edition
1. Financial Markets - ANSWER - markets that channel funds from those who
have an excess of available funds to those with a shortage
- also promote economic efficiency
- channel funds from those without a productive use to those with a
productive use but has shortage of money
2. What promotes Economic Efficiency? - ANSWER Financial Markets
3. Why issue bonds? - ANSWER to raise money to spend on capital
4. How do you measure the performance of an economy? - ANSWER GDP
5. Gross Domestic Product (GDP) - ANSWER *market value* of *final*
goods and services *produced within the borders* of a country during one
year
6. Circular flow of income and expenitures - ANSWER - goods & services:
corporation to household
, - consumer expenditures: household to corporation
-wages, rent, dividends: corporation to household
-factors of production: household to corporation
-income = output***
7. Aggregate output - ANSWER - total production of goods & services
- aggregate income = aggregate output
8. Aggregate income - ANSWER - total income earned producing all of the
goods and services
- aggregate income = aggregate output
9. Employment - ANSWER - all work for pay or profit during the survey
week
- includes: full time, part time, temporary work
10.Unemployment - ANSWER if:
- do not have a job
, - are available for work
- have been actively seeking work in the previous 4 weeks
11.Labor Force - ANSWER - the sum of the employed and unemployed
- LF = E+U
12.Unemployment Rate - ANSWER # of unemployed / labor force x 100
13.Why do we need Financial Markets? - ANSWER 1. matching of borrowers
and lenders
2. transaction costs --> time, energy, money
3. asymmetric information
14.Asymmetric Information - ANSWER - adverse selection
- moral hazard
15.Adverse Selection - ANSWER people with the least money & highest risk
will want to borrow first
16.Moral Hazard - ANSWER change in behavior to act poorly with loan
17.****AIG & collapse of housing market****
Guide (Questions with Verified
Answers) Already Graded A+ |
Latest Edition
1. Financial Markets - ANSWER - markets that channel funds from those who
have an excess of available funds to those with a shortage
- also promote economic efficiency
- channel funds from those without a productive use to those with a
productive use but has shortage of money
2. What promotes Economic Efficiency? - ANSWER Financial Markets
3. Why issue bonds? - ANSWER to raise money to spend on capital
4. How do you measure the performance of an economy? - ANSWER GDP
5. Gross Domestic Product (GDP) - ANSWER *market value* of *final*
goods and services *produced within the borders* of a country during one
year
6. Circular flow of income and expenitures - ANSWER - goods & services:
corporation to household
, - consumer expenditures: household to corporation
-wages, rent, dividends: corporation to household
-factors of production: household to corporation
-income = output***
7. Aggregate output - ANSWER - total production of goods & services
- aggregate income = aggregate output
8. Aggregate income - ANSWER - total income earned producing all of the
goods and services
- aggregate income = aggregate output
9. Employment - ANSWER - all work for pay or profit during the survey
week
- includes: full time, part time, temporary work
10.Unemployment - ANSWER if:
- do not have a job
, - are available for work
- have been actively seeking work in the previous 4 weeks
11.Labor Force - ANSWER - the sum of the employed and unemployed
- LF = E+U
12.Unemployment Rate - ANSWER # of unemployed / labor force x 100
13.Why do we need Financial Markets? - ANSWER 1. matching of borrowers
and lenders
2. transaction costs --> time, energy, money
3. asymmetric information
14.Asymmetric Information - ANSWER - adverse selection
- moral hazard
15.Adverse Selection - ANSWER people with the least money & highest risk
will want to borrow first
16.Moral Hazard - ANSWER change in behavior to act poorly with loan
17.****AIG & collapse of housing market****
