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The spending multiplier is equal to this.
What is 1/MPS or 1/(1-MPC)?
Buying and selling of stocks and bonds
What are open market operations?
Fiscal policy can only be conducted by this entity.
What is the President and Congress?
The money multiplier is equal to the reciprocal of this.
What is the reserve requirement?
If Pancho the expert video cassette maker is unemployed recently due to the advent of DVD's, his unemployment is of this type.
What is structural?
The total number of people who are employed or actively looking for work in a given population
What is the labor force?
When contractionary fiscal policy is pursued and the government wishes to increase taxes but decrease spending, it acquires this.
What is a surplus?
Expansionary Monetary Policy consists of decreasing the reserve requirement, buying bonds, and this.
What is decreasing the discount rate?
An increase in this causes the crowding out of investment spending.
What is the interest rate?
The maximum amount of money a bank can loan out is equal to this.
What is its excess reserves?
Expansionary fiscal policy closes this gap
What is an recessionary gap?
When a bank makes a loan, it is exchanging "new" money for this.
What is an IOU?
The GDP is comprised of investment spending, government spending, net exports, and this.
What is consumer spending?
This is the rate that the Federal Reserve charges to banks for overnight loans.
What is the discount rate?
When the US government increases spending, this happens to the loanable funds market.
What is the demand for loanable funds shifts right?
The supply of loanable funds shifts right when individuals are more inclined to do this.
What is save?
Expansionary fiscal policy entails decreasing taxes and increasing this.
What is government spending?
When an individual cashes a check in a bank, these increase.
What are checkable deposits and reserves?
Bob lives in is mom's basement. He is in between jobs but has no intention of finding a new one. He is this type of unemployment.
He is not frictionally unemployed. He doesn't even count. He is a freeloader.
BONUS --> WHAT IS FRICTIONAL UNEMPLOYMENT?
Contractionary monetary policy serves to close the inflationary gap through doing this.
What is decreasing the money supply.
The interest rate that banks charge each other to borrow money
What is the Federal Funds Rate?
The natural rate of unemployment, found at the full employment level, is when there is none of this type of unemployment.
What is cyclical?
As the money supply increases, this decreases.
What is the nominal interest rate?
Crowding out has its most serious effects when this type of fiscal policy is pursued.
What is expansionary fiscal policy?
The goal of contractionary fiscal policy is to close this.
What is the inflationary gap?