The Fed
The lowest interest rate that the Fed charges banks
What is the Discount Rate?
Measures the rate of inflation in a country
What is the Consumer Price Index (CPI)?
A prolonged or especially bad contraction
What is a Depression?
Goods brought into the country through trade
What are Imports?
A tax on imported goods
What is a Tariff?
The percentage of deposits banks are required to keep in their vaults
What is the Reserve Requirement?
A rapid increase of inflation
What is Hyperinflation?
A period of increasing GDP
What is an Expansion?
Goods sent out of the country through trade
What are Exports?
A limit on the amount of goods that can be imported
What is a Quota?
The buying and selling of U.S. Treasury Bonds on the open market
What is Open Market Operations?
Occurs when your employment follows the business cycle
What is Cyclical Unemployment?
2 quarters of declining GDP
What is a Recession?
The ability to produce more of a good than all other producers
What is Absolute Advantage?
The free-flow of goods and services between countries without any restrictions or barriers
What is Free-Trade?
The Fed uses this to expand or contract the money supply
What is Monetary Policy?
Unemployment of 5-6%
What is the Natural Rate of Unemployment?
The point where the economy has reached its best and will start turn downward
What is a Peak?
The ability to produce a good at a lower opportunity cost than other producers
What is Comparative Advantage?
A direct payment to domestic industry designed to increase exports
What is a Subsidy?
The Government uses this to influence economic growth through manipulation of taxes or government spending
What is Fiscal Policy?
Measures the market value of all goods and services produced within a nation
What is the Gross Domestic Product (GDP)?
The bottom of the cycle which should theoretically always be higher than the previous cycle
What is a Trough?
Gives access to goods and services that the nation could otherwise not produce
What is Trade?
Government order which complete blocks all trade with a particular country
What is an Embargo?