Vocabulary 1
– Earnings received as interest, rent, profit and wages or salaries.
What is INCOME
Government revenues equal expenditures on an annual basis.
What is BALANCED BUDGET
Deflation occurs when
a. there is a sustained increase in the price of gasoline.
b. there is a sustained decrease in the price of gasoline.
c. there is a sustained increase in the overall price of goods and services.
d. there is a sustained decrease in the overall price of goods and services.
e. a and c only
d. there is a sustained decrease in the overall price of goods and services.
****BONUS POINTS**** If you get both answers you will receive DOUBLE points.
Which of the following is a function of the Federal Reserve?
a. makes monetary policy
b. prints currency and mints coin
c. regulates and supervises banks
d. all of the above
e. a and c only
e. a and c only
The money supply is the amount:
a. of gold in Fort Knox.
b. the federal government has to spend each year.
c. of currency printed each year by the Bureau of Engraving and Printing.
d. of currency, coins and checking account deposits available in an economy.
d. of currency, coins and checking account deposits available in an economy
A general, sustained upward movement of prices for goods and services in an economy.
What is INFLATION
– When a bank’s liabilities (mainly deposits) exceed the value of its assets.
What is BANK FAILURE
inflation occurs when
a. there is a sustained increase in the price of gasoline.
b. there is a sustained decrease in the price of gasoline.
c. there is a sustained increase in the overall price of goods and services.
d. there is a sustained decrease in the overall price of goods and services.
e. a and c only
c. there is a sustained increase in the overall price of goods and services.
By studying the Great Depression, economists have come to understand:
a. the importance of money, credit, and a safe and sound financial system.
b. the need to maintain a balanced budget regardless of economic conditions.
c. the importance of the government’s responsibility to set prices for goods and services during periods of inflation or deflation.
d. a and b only
e. b and c only
a. the importance of money, credit, and a safe and sound financial system.
****BONUS POINTS**** If you answer the question with both answers you will double your points.
Which of the following statements regarding deflation is true?
a. It causes people to postpone purchases.
b. It robs the purchasing power of people’s savings.
c. It causes a decline in prices and demand for goods and services.
d. a and b only
e. a and c only
e. a and c only
– The total amount of outstanding government securities held by the public; the financial obligations of a national government resulting from deficit spending, also called public debt.
What is NATIONAL DEBT
When many depositors rush to the bank to withdraw their money at the same time.
What is BANK RUN
How did the stock market crash, the closing of the Ford Model T plant and the collapse of the farming industry contribute to the economic collapse known as the Great Depression?
a. These increased unemployment and output.
b. These increased unemployment and prices.
c. These destroyed jobs, wealth and people’s confidence in the economy.
d. a and b only
e. a and c only
c. These destroyed jobs, wealth and people’s confidence in the economy
The Federal Reserve System was:
a. established in 1913 as the nation’s central bank.
b. established in 1939 to prevent future depressions.
c. not responsible for monetary policy during the Great Depression
a. established in 1913 as the nation’s central bank.
Monetary policy refers to:
a. spending and taxation decisions of the federal government to influence the economy.
b. actions of the Federal Reserve to influence the amount of money and credit in the economy.
c. actions of the Bureau of Engraving and Printing and the Mint to print currency and mint coins.
b. actions of the Federal Reserve to influence the amount of money and credit in the economy
The central bank of the United States.
What is THE FEDERAL RESERVE SYSTEM
A tax on imported goods. The Smoot-Hawley Tariff Act of June 1930 raised U.S. tariffs to historically high levels
What is SMOOT-HOWLEY TARIFF
Technology that assisted President Roosevelt in conveying messages that restored citizens’ confidence in the U.S. economy included:
a. radio.
b. computers.
c. television.
d. MP3 players.
e. Internet blogs
a. radio
What body makes monetary policy decisions for the United States?
a. the United States Congress
b. the Federal Reserve System
c. the judicial branch of the government
d. the executive branch of the government
e. the President’s Council of Economic Advisers
b. the Federal Reserve System
A bank panic occurs when:
a. a bank’s assets exceed the value of its liabilities.
b. many depositors rush to the bank to withdraw their money at the same time.
c. depositors recognize that they do not have as much money in their accounts as they anticipated.
b. many depositors rush to the bank to withdraw their money at the same time.
A very severe recession; a period of severely declining economic activity spread across the economy (not limited to particular sectors or regions) normally visible in a decline in real GDP, real income, employment, industrial production, wholesale-retail credit and the loss of overall confidence in the economy.
What is THE DEPRESSION
The number of people 16 years of age and older who are without jobs and actively seeking work
What is UNEMPLOYMENT
What is the Federal Reserve System?
a. the nation’s central bank
b. the U.S. Department of Banking
c. U.S. Department of the Treasury, Banking Division
d. the legal requirement that interest must be paid on loans.
e. the only national bank in the United States, located in Washington, D.C
a. the nation’s central bank
The purpose of Roosevelt’s New Deal legislation was: a. to provide relief programs to help immediately.
b. to provide recovery programs to help rebuild.
c. to provide reform programs to prevent the disaster from reoccurring.
d. all of the above
d. all of the above
With both deflation and inflation:
a. people buy today rather than wait.
b. people wait to buy until tomorrow.
c. people and businesses have reduced purchasing power.
d. people and businesses have difficulty planning for the future
d. people and businesses have difficulty planning for the future