Macroeconomic Aims
Are the economically inactive counted in the labor force?
They are not counted
The 2 main tools of fiscal policy.
Government spending and taxation
Lower\Higher rates make loans cheaper and tend to increase borrowing and spending
Lower
Inflation\Deflation= price overall go down
Deflation
True\False:Cost push means higher costs push firms to reduce price
False it's raise price
What are the two ways of economic growth?
Short-run growth & Long-run growth
Cutting business taxes to boost growth is _____ fiscal policy.
Expansionary
Monetary Policy is managed by _____ bank and involves controlling _____ _____ and the money _____
central; interest rates; supply
What is the difference between disinflation and inflation?
Disinflation=the rate of inflation slow down(stable)
The 'C' in CPI stands for ___
Consumer
What does "The labor force" equal？
Labor Force🟰people working➕people looking for work
What happened when the budget deficit occurred?
spending>taxes, the government borrows money
True\False:Reserve requirements & guidance is telling banks how much cash they must keep or encouraging them to lend more.
True
If CPI rises from 250 to 275, the inflation rate is ___%.
10%
What would increase the money supply?
An increase in bank lending
Why governments want to achieve full employment
The government is committed to achieving full employment, as this can promote economic growth, reduce poverty and maintain social stability. This not only can boost the national average GDP, enhance the overall quality of the population, but also reduce the country's economic assistance to the unemployed.
Identify the type of tax collection “lower earners pay a higher share of their income"
Regressive
The Fed's(the central bank of the United States)most frequently used tool.
Open market operations
By using ___ can measure inflation
Use a price index like CPI
Identify what type of question the previous one is.
Monetary Policy
Explain what "redistribution" means and why it is important?
"Redistribution" means using taxes and benefits，government move money from richer people to poorer people.\ Because it helps everyone get basic services and reduce poverty gap.
Explain why the government collects taxes（Choose 1-2 points）
1.Raise revenue for services. 2.Share wealth: richer people pay higher rates 3.Discourage bad goods. extra tax on cigarettes or alcohol 4.Protect local firms: tariffs on imported goods 5.Control demand: cut taxes in a slowdown to encourage spending
Why monetary policy matters?
Changes affect household spending, business investment, and even exchange rates ,which change export prices.
Where does the good deflation come from?
Good deflation comes from better technology or productivity---cheaper goods and stronger exports
Explain one similarity and one difference between monetary policy and fiscal policy.
Monetary policy is managed by a country's central bank through tools such as interest rates and money supply adjustments.Fiscal policy is controlled by the government through changes in taxation and public spending.