Econ 203 Midterm Exam Questions (196 Terms) With Verified Definitions Updated 2024

Total Investment {Ans: I = Y - C - G (in a closed economy)}Are credit cards apart of money supply? {Ans: NO}net capital flows {Ans: capital inflows - capital outflows}Knowledge capital {Ans: research, development and other technological advances - non-rival -non-excludable - increases returns}The multiplier effect {Ans: An effect in economics in which an increase in spending produces an increase in national income and consumption greater than the initial amount spent. The series of induced increases in consumption spending that results from an initial increase in autonomous expenditure}short run determiners of exchange rate {Ans: interst rates and investors expectations}Real vs. Nominal Interest Rates {Ans: Real- interest rates corrected for the effects of inflation. Nominal- interest rate as usually reported, without a correction for the effects of inflation.}Government budget {Ans: Spublic = 0: Gov. spent as much as it received in taxes which is a balanced budget (T = G + TR) Spublic = <0: Gov. over-spent so we are in a deficit (T < G + TR) Spublic = >0: Gov. Under-spent so we are in a surplus (T > G + TR)}seasonal unemployment {Ans: unemployment that occurs as a result