BAC101 MIDTERM EXAM REVIEWER

• Macroeconomics


  Looks at how entire economies behave and studies the pressing social problems of economic growth, inflation, and unemployment
• Macroeconomist


  Study the overall price level, unemployment rate, and other things that we call economic aggregates
• Aggregation


  Means combining many individual markets into one overall market
• Supply schedule


  Tables showing how the quantity supplied of some products change as the price of those products change during a specified period of time, holding all other determinants of quantity supplied constant
• Supply surplus


  An excess of quantity supplied over quantity demanded. When there is a surplus, sellers cannot sell the quantities they desire to supply at the current price
• Supply shortage


  An excess of quantity demanded over quantity supplied. When there is a shortage, buyers cannot purchase the quantities they desire at the current price
• Equilibrium


  A situation in which there are no inherent forces that produce change. Changes away from equilibrium position will occur only as a result of "outside events that disturb the status quo
• Law of Supply and Demand


  States that in a free market the forces of supply and demand generally push the price toward the level at which quantity supplied and quantity demanded are equal
• Inflation


  Refers to a sustained increase in the general price level
• Recession


  A period of time during which the total output of the economy declines
• Supply and demand analysis- is just as fundamental to macroeconomics microeconomics.

  Supply and demand analysis- is just as fundamental to macroeconomics microeconomics.
• Recession and unemployment


  Can be illustrated on a supply–demand diagram by shifting the demand curve in the opposite direction
• Economic growth


  The original aggregate demand and supply curves shift to the right over time, moving to D1 and S1, respectively
• Gross Domestic Product (GDP)


  The sum of the money values of all final goods and services produced in the domestic economy and sold on organised markets during a specified period of time, usually a year
• Price Ceiling


  Keeps a price from rising above a certain level—the "ceiling"
• Price Floor


  Keeps a price from falling below a certain level—the "floor"
• Aggregate Supply Curve


  Shows, for each possible price level, the quantity of goods and services that all the nation's businesses are willing to produce during a specified period of time, holding all other determinants of aggregate quantity supplied constant
• Aggregate Demand Curve


  Shows the quantity of domestic product that is demanded at each possible value of the price level
• Real GDP


  Calculated by valuing outputs of different years at common prices. Therefore, real GDP is a far better measure than nominal GDP of changes in total production
• Nominal GDP


  Calculated by valuing all outputs at current prices
• Final Goods and Services


  Those that are purchased by their ultimate users
• Intermediate Goods


  Goods purchased for resale or for use in producing another good
• Real GDP per capita


  The ratio of real GDP divided by population
• Stagflation


  Inflation that occurs while the economy is growing slowly ("stagnating") or in a recession
• Deflation


  A sustained decrease in the general price level
• Monetary Policy


  Actions taken by the Federal Reserve to influence aggregate demand, mainly by changing interest rates
• Fiscal Policy


  The government's plan for spending and taxation. It can be used to steer aggregate demand in the desired direction
• Stabilization Policy


  Government programs designed to prevent or shorten recessions and to counteract inflation (that is, to stabilize prices)
• What is the basis of the Information Society?

  Science and technology applied to everyday life
• What risks does social media pose?

  Dissemination of false information
• How can technology in the Information Society be problematic?

  It can be a source of noise and misinformation
• Why is the printing press in the 15th century significant?

  It allowed for the preservation of words
• What characterizes the Information Age?

  Easy access to information and knowledge
• What does the World Wide Web (WWW) consist of?

  Resources and users using HTTP
• How were commodities created before the Industrial Revolution?

  Almost all were created by hand
• What was a consequence of increased productivity during the Industrial Revolution?

  Surge in unemployment due to machine replacement
• What does industrialization refer to?

  Advancement in technology for large-scale production
• What marked Industrial Revolution 1.0?

  Transition from hand production to machines
• What characterized Industrial Revolution 2.0?

  Economic expansion and rise in productivity
• What was a feature of Industrial Revolution 3.0?

  Slowdown of industrialization with computer use