Fiscal and Monetary Policy
FOMC stands for this
What is Federal Open Market Committee?
annual rate at which interest is paid; a percentage of the borrowed amount
what is interest rate?
percentage of the labor force that is unemployed
what is the unemployment rate?
the total market value of all final goods and services produced in a given year
What is GDP?
something, typically money, that is owed or due
What is debt?
the amount by which the expenditures of the Federal government exceed its revenues in any year.
What is a Budget deficit?
although changes in non income determinants can shift the consumption and savings schedules, usually these schedules are relatively stable
What is stability?
consist of people who are able and willing to work
What is the labor force?
goods and services that are purchased for final use by the consumer, not for resale or for further processing or manufacturing
What are final goods?
sustained increase in the general price level of goods and services in an economy over a period of time
What is inflation?
the amount by which the revenues of the Federal government exceed its expenditures in any year
What is a budget surplus?
tendency for people to increase their consumption spending when the value of their financial and real assets rises and to decrease their consumption spending when the value of those assets falls
What is the Wealth Effect?
alternating rises and declines in the level of economic activity
what is the business cycle? Daily Double!
GDP per person, the average GDP of a population
What is per capita GDP?
this nation has the highest GDP in the world
What is the United States?
Changes in government spending and tax collections designed to achieve a full-employment and non inflationary domestic output
What is fiscal policy?
Changes in wealth, expectations, interest rates, and household debt will shift the consumption schedule in one direction and the saving schedule in the opposite direction
What are schedule shifts?
measure of average output or real output per unit of input
What is productivity?
GDP measure in terms of the price level at the time of measurement
What is nominal GDP?
numerical measurement of the US total debt (ex. millions, billion, etc.)
What is Trillions?
central bank’s changing of the money supply to influence interest rates and assist the economy in achieving price stability, full employment, and economic growth
What is Monetary Policy?
Increase in household debt, leads to increase in
what is consumption?
type of unemployment caused by workers voluntarily changing jobs and by temporary layoffs; unemployed workers between jobs
what is frictional unemployment?
formula for GDP
What is GDP=C+I+G+(X-M)?
a mechanism that increases government’s budget deficit (or reduces surplus) during a recession and increases government’s budget surplus (or reduces its deficit) during inflation without any action by policymakers.