Econ 212 Final Exam Study Guide 2026
Questions and Answers Graded A+
3 types of unemployment - Correct answer---cyclical
--frictional
--structural
cyclical unemployment - Correct answer-the increase in unemployment that occurs
during recessions and depressions
frictional unemployment - Correct answer-unemployment due to normal turnover
in the labor market; used to denote short-run job/skill-matching problems
structural unemployment - Correct answer-unemployment due to changes in the
structure of the economy that result in a significant loss of jobs in certain industries
Transfer payments - Correct answer---cash payments made by the government to
people who do not supply goods, services, or labor in exchange for these payments
--ex: social security benefits, veterans' benefits, and welfare payments
,How do we account for transfer payments in GDP accounting? - Correct answer-
they are counted as part of the total income received by the households
Real Interest Rate - Correct answer-the difference between the interest rate on a
loan and the inflation rate
How is the real interest rate related to inflation? - Correct answer-
Comparative Advantage - Correct answer---a producer has a comparative
advantage over another in the production of a good or service if he or she can
produce that product at a lower opportunity cost
--the advantage in the production of a good enjoyed by one country over another
when that good can be produced at a lower cost in terms of other goods than it
could be in the other country
opportunity cost - Correct answer-the best alternatie that we give up, or forgo,
when we make a choice or decision
How do we determine comparative advantage? - Correct answer-whoever can
produce the produce at a lower opporunity cost
Why do we use money for transactions? - Correct answer-because it is:
1.) a means of payment (medium of exchange)
2.) a store of value
, 3.) a unit of account
means of payment or medium of exchange - Correct answer-what sellars generally
accept and buyer generally use to pay for goods and services
store of value - Correct answer-an asset that can be used to transport purchasing
power from one time period to another
unit of account - Correct answer-a standard unit that provides a consistent way of
quoting prices
liquidity property of money - Correct answer-the property of money that makes it a
good medium exchange as well as a store of value: It is portable and readily
accepted and thus easily exchanged for goods
Barter - Correct answer---goods are exchanged directly for other goods
What is the advantage to using money as opposed to barter? - Correct answer---
barter is costly and inefficient in an economy with many different kinds of goods
--barter requires a double coincidence of wants for trade to take place
Commodity Monies - Correct answer-items used as money that also have intrinsic
value in some other use
Fiat Monies - Correct answer-items designated as money that are intrinsically
worthless
Questions and Answers Graded A+
3 types of unemployment - Correct answer---cyclical
--frictional
--structural
cyclical unemployment - Correct answer-the increase in unemployment that occurs
during recessions and depressions
frictional unemployment - Correct answer-unemployment due to normal turnover
in the labor market; used to denote short-run job/skill-matching problems
structural unemployment - Correct answer-unemployment due to changes in the
structure of the economy that result in a significant loss of jobs in certain industries
Transfer payments - Correct answer---cash payments made by the government to
people who do not supply goods, services, or labor in exchange for these payments
--ex: social security benefits, veterans' benefits, and welfare payments
,How do we account for transfer payments in GDP accounting? - Correct answer-
they are counted as part of the total income received by the households
Real Interest Rate - Correct answer-the difference between the interest rate on a
loan and the inflation rate
How is the real interest rate related to inflation? - Correct answer-
Comparative Advantage - Correct answer---a producer has a comparative
advantage over another in the production of a good or service if he or she can
produce that product at a lower opportunity cost
--the advantage in the production of a good enjoyed by one country over another
when that good can be produced at a lower cost in terms of other goods than it
could be in the other country
opportunity cost - Correct answer-the best alternatie that we give up, or forgo,
when we make a choice or decision
How do we determine comparative advantage? - Correct answer-whoever can
produce the produce at a lower opporunity cost
Why do we use money for transactions? - Correct answer-because it is:
1.) a means of payment (medium of exchange)
2.) a store of value
, 3.) a unit of account
means of payment or medium of exchange - Correct answer-what sellars generally
accept and buyer generally use to pay for goods and services
store of value - Correct answer-an asset that can be used to transport purchasing
power from one time period to another
unit of account - Correct answer-a standard unit that provides a consistent way of
quoting prices
liquidity property of money - Correct answer-the property of money that makes it a
good medium exchange as well as a store of value: It is portable and readily
accepted and thus easily exchanged for goods
Barter - Correct answer---goods are exchanged directly for other goods
What is the advantage to using money as opposed to barter? - Correct answer---
barter is costly and inefficient in an economy with many different kinds of goods
--barter requires a double coincidence of wants for trade to take place
Commodity Monies - Correct answer-items used as money that also have intrinsic
value in some other use
Fiat Monies - Correct answer-items designated as money that are intrinsically
worthless
