GDP
What is real GDP (gross domestic product)?
The value of economic output that is adjusted for inflation
When a government is required by law to spend money, this is know as what?
Mandatory Spending
About how much is the U.S.'s national debt?
~30 trillion
What type of fiscal policy is it when the government cuts taxes and increases governement spending?
Expansionary
What does CPI stand for?
The Consumer Price Index
What do you call the period of the business cycle when real GDP stops falling?
Trough
What type of spending do Student Loans fall under?
Discretionary Spending
What branch (or branches) control the federal budget?
Legislative and Executive Branches
What type of fiscal policy is it when the government raises taxes and cuts government spending?
Contractionary
Why does the government tax?
To raise money so that they can give the people goods and services
In the business cycle, what type of indicator are stock market prices considered to be?
Leading Indicator
Which program would be the most unpopular to cut spending for?
Military bases
Name two ways the government can help fix a budget deficit?
Cut spending, raise taxes, sell bonds (aka borrow money)
What major time in history influenced people to look to the Keynesian economic theory?
Great Depression
If there are low interest rates on savings accounts, how does it affect how people save?
It discourages savings
How do you calculate GDP?
Total dollar value of all final goods and services produced in the US
The largest pecentage of federal spending in the US goes towards what?
Social Security and Medicare
What is the main reason why it is so hard to balance the federal budget?
It is not popular to raise taxes and cut spending
What fiscal policy gives businesses tax breaks and subsidies?
Supply Side Economics
What is the CPI used to determine?
The rate of inflation on non-durable inelastic goods
What is the relation between aggregate demand and GDP?
When demand increases, GDP increases as well
Programs such as Medicare, Medicaid, and Social Security are also called what?
Entitlement
When the government prints more money to fix large deficits, what is the result?
Hyperinflation
Describe the difference between Classical Economics and Keynesian Economics
Classical = Free market, it will fix itself; Keynesian = needs government intervention
What branch of government is in charge of the Office of Management and Budget?
Executive Branch