Monetary Policy
Monetary policy is conducted by
The Federal Reserve Board (FED)
Fiscal policy is conducted by
Expenditure approach for calculating GDP
C + I + G + Xn
The LRAS is _____ the equilibrium in a negative output gap
Above
Frictional, cyclical, structural
Expansionary monetary policy
Lower interest rates, buy securities
Expansionary fiscal policy
Increase government spending, decrease taxes
Nominal GDP / GDP Deflator x 100
The LRAS is _______ the equilibrium in a positive output gap
Below
Deficit spending is _______, while budget deficit is _______ over time
Annual, Accumulated
Contractionary monetary policy
Increase interest rates, sell securities
Contractionary fiscal policy
Decrease government spending, increase taxes
Equation of the tax multiplier
MPC / MPS
Shifters of aggregate demand
C + I + G + Xn
What does MPS and MPC stand for?
Marginal propensity to save, marginal propensity to consume
The X and Y axes of the Phillip's Curve are labeled
Unemployment and inflation, respectively
The time it takes to determine that a recession has occurred
Recognition Lag
Equation of the spending multiplier
1 / MPS
Shifters of aggregate supply
Change in wages and resource costs
The impact of increased government deficit spending resulting in higher interest rates leading to less investment spending in an economy
Crowding out
Leader of the FED
Jerome Powell
Besides spending and taxes, _______ is associated with fiscal policy
Government transfers
Equation for unemployment rate
Quantity unemployed / Quantity in the labor force x 100
Shifters of long run aggregate supply
A measure of the satisfaction received from some type of economic activity (i.e. consumption of goods and services or the sale of factor services)
Utility