Macro Exam 1- Thorsen PBSC
severe poverty - answer earning less than $3.10 per day
extreme poverty - answer earning less than $1.90 per day
UN. Millenium goal - answer signed in September 2000, commits world leaders to
combat poverty, hunger, disease, illiteracy, environmental degradation, and
discrimination against women.
2 Policy strategies to decrease global poverty - answer1. Redistribution
2. Economic growth
Redistribution - answer___________ of income within and across nations
Economic growth - answer_________ that raises average incomes
Types of income redistribution/factors that contribute to economic growth - answer food
stamps, Medicaid, welfare
Across Nation redistribution - answerForeign Aid: Developed nations give $150 billion a
year in "assistance
Non-Government Aid:
-Gates Foundation
- Red Cross
Human Capital - answerthe skills and knowledge gained by a worker through education
and experience
Key factors in productivity - answerLand, Labor, Capital, Entrepreneurship
Solutions for growth - answercapital investment, investing in physical and human
capital, agricultural development, institutional reforms, and world trade
capital investment - answerinvest in physical capital (equipment, transportation,
communication)
microfinance - answerthe granting of small, unsecured loans to a small business and
entrepreneurs
agricultural development - answerincreases in farm productivity improves economic
growth (poor nations are more dependent on this)
, institutional reforms - answerexpanded property rights, entrepreneurial incentives,
equity, and business climates with economic freedom
world trade - answereveryone will benefit from comparative advantage; helps poorer
nations from expanding growth
Importance of economic freedom - answercountries with more freedom have a higher
GDP per capita and better resources (healthcare, education system, protection, income
equality, and happiness results.)
Macroeconomics - answerthe study of aggregate economic behavior, of the economy
as a whole
Microeconomics - answerthe study of individual behavior in the economy, of the
components of the larger economy
Macro v Micro - answermacro focuses on the economy as a whole, and micro focuses
on specific consumer behavior
scarcity - answerlack of enough resources to satisfy all desired uses of those resources
opportunity costs - answerthe most desired goods or services that are forgone in order
to obtain something else
Production Possibilities Curve - answerthe final alternative combinations of final goods
and services that could be produced in a given period with all available resources and
technology
law of increasing costs - answerlaw that states that as we shift factors of production
from making one good or service to another, the cost of producing the second item
increases
Econ growth as depicted by PPC - answercurve shifts to the right when there is growth
in the economy. (more resources, technology)
Fundamental Questions of Economics - answerWhat to produce? How to produce? For
whom to produce?
Factors that impact how to produce - answerLand, labor, capital, entrepreneurship.
Invisible hand - answerterm economists use to describe the self-regulating nature of the
marketplace
Market mechanism - answerthe use of market prices and sales to signal desired outputs
(or resource allocations). Invisible hand
severe poverty - answer earning less than $3.10 per day
extreme poverty - answer earning less than $1.90 per day
UN. Millenium goal - answer signed in September 2000, commits world leaders to
combat poverty, hunger, disease, illiteracy, environmental degradation, and
discrimination against women.
2 Policy strategies to decrease global poverty - answer1. Redistribution
2. Economic growth
Redistribution - answer___________ of income within and across nations
Economic growth - answer_________ that raises average incomes
Types of income redistribution/factors that contribute to economic growth - answer food
stamps, Medicaid, welfare
Across Nation redistribution - answerForeign Aid: Developed nations give $150 billion a
year in "assistance
Non-Government Aid:
-Gates Foundation
- Red Cross
Human Capital - answerthe skills and knowledge gained by a worker through education
and experience
Key factors in productivity - answerLand, Labor, Capital, Entrepreneurship
Solutions for growth - answercapital investment, investing in physical and human
capital, agricultural development, institutional reforms, and world trade
capital investment - answerinvest in physical capital (equipment, transportation,
communication)
microfinance - answerthe granting of small, unsecured loans to a small business and
entrepreneurs
agricultural development - answerincreases in farm productivity improves economic
growth (poor nations are more dependent on this)
, institutional reforms - answerexpanded property rights, entrepreneurial incentives,
equity, and business climates with economic freedom
world trade - answereveryone will benefit from comparative advantage; helps poorer
nations from expanding growth
Importance of economic freedom - answercountries with more freedom have a higher
GDP per capita and better resources (healthcare, education system, protection, income
equality, and happiness results.)
Macroeconomics - answerthe study of aggregate economic behavior, of the economy
as a whole
Microeconomics - answerthe study of individual behavior in the economy, of the
components of the larger economy
Macro v Micro - answermacro focuses on the economy as a whole, and micro focuses
on specific consumer behavior
scarcity - answerlack of enough resources to satisfy all desired uses of those resources
opportunity costs - answerthe most desired goods or services that are forgone in order
to obtain something else
Production Possibilities Curve - answerthe final alternative combinations of final goods
and services that could be produced in a given period with all available resources and
technology
law of increasing costs - answerlaw that states that as we shift factors of production
from making one good or service to another, the cost of producing the second item
increases
Econ growth as depicted by PPC - answercurve shifts to the right when there is growth
in the economy. (more resources, technology)
Fundamental Questions of Economics - answerWhat to produce? How to produce? For
whom to produce?
Factors that impact how to produce - answerLand, labor, capital, entrepreneurship.
Invisible hand - answerterm economists use to describe the self-regulating nature of the
marketplace
Market mechanism - answerthe use of market prices and sales to signal desired outputs
(or resource allocations). Invisible hand
