Part III Matching __1. GDP Gap __2. Business Cycle __3. C + I + G + Xn __4. Factors of Production __5. DPI __6. Discretionary Income __7. Autonomous Consumption __8. Induced Consumption __9. Permanent Income Hypothesis __10. Fiscal Year __11. GDP Deflator __12. Misery Index __13. Full Employment GDP __14. Keynesian Economics __15. Aggregate Demand __16. Dissavings __17. Capital Goods __18. Externalities __19. Alienation __20. Anomie __21. Keynesian Cross __22. Regressive Tax __23. Progressive Tax __24. Consumption Tax __25. Unemployment Rate __26. Rational Expectations Answers to Matching III A. Combines the unemployment rate and the rate of inflation. B. Property Taxes and Social Security Taxes are examples of this. C. expansion, peak, contraction, trough D. land, labor, capital, and entrepreneurship. E. in Liebniz theory of the monad, this is the psychological state that leads to alienation. F. governmental budget year. G. the difference between actual output and potential output. H. that part of income for which real choices as to consumption and investment are possible. I. the fundamental concern in Keynesian economics is to raise the level of this. J. additional consumption attributable to an increase of income. K. on the Keynesian cross curve, this is the aggregate amount of consumption above disposable income. L. plots expenditures for consumption against disposable income changes about a bisecting line which shows savings and dissavings. M. in Marxian analysis, this results from over-specialization and the expropriation of surplus value and detachment feom the productive process, dependent on what stage of Marx's analysis you look at. N. goods the function of which is the production of consumer goods and services. O. from Milton Friedman, this holds that additional income will be treated by a recepient in the same way as previous income was. P. suggests that people act as if they will continue to see the same kind of economic conditions as they have recently experienced. Q. is calculated by dividing the number of unemployed persons by the workforce. R. Japanese tax rates appear higher than ours but are not because they only tax expenditures and not savings. S. method for adjusting nominal value of goods and services produced to reflect the rate of inflation. T. somewhat like 'take home pay,' it is the income available for paying the costs of living. U. what the value of goods and services produced would be if there was only frictional unemployment. V. major concern is governmental policy to close the GDP gap by increasing government expenditure W. cost and benefit results of productive process which affect those not immediately involved in that process. X. one of the ways to estimate GDP, and which suggests one of the problems with Keynesian analysis in that it clearly shows that increasing governmental expenditure, which must come out of consumption or investment, will not do quite what Keynes suggested it would. Y. the federal graduated income tax is perhaps the best example of this which places higher tax rates on higher income levels. Z. an amount of expenditure required for subsistence even given no income. 71-78 A 63-70 B 55-62 C 47-54 D The test is due by Thursday, Feb. 19, 1998 THIS HAS BEEN A TEST Return to Beginning of Mid-Term Return to Part II of Mid-Term