Business Cycle
It is the highest point within the economic/business cycle.
What is the peak?
Fiscal Policy is their toolbox.
Who is the government (Pres & Congress)?
Monetary Policy is their toolbox.
Who is the Fed (Federal Reserve)?
A decrease in interest rates would likely have this impact on business investments and general consumption.
What is increase?
The Defense budget requires annual approval by Congress. This type of program is classified as this kind of spending.
What is discretionary?
It is the lowest point in the business cycle.
What is the trough?
When the federal government spends more than it brings in through tax revenue we say they are running one of these.
What is a deficit?
The Fed can affect the money supply by adjusting this; increasing or decreasing the interest charged to banks to borrow money.
What is the discount rate?
If the federal government were attempting to reduce inflation and slow the economy they would enact this type of policy.
What is a contractionary fiscal policy?
What is non-discretionary?
A drastic economic downturn that lasts for roughly 3 or more years and sees a 10% or more drop in real GDP.
What is a depression?
What is debt?
When unemployment is high, the Fed will likely enact this type of monetary policy?
What is Expansionary/easy?
The Fed is attempting to fight high unemployment and low business investments. They would likely enact this type of policy.
What is an expansionary monetary policy?
When the government is bringing in more tax revenue than it spends?
What is a surplus?
A decline in employment, consumer spending, and general economic downturn for at least two fiscal quarters describe this portion of the business cycle.
What is a recession?
In an attempt to provide jobs and financial relief to the American public, the government could increase this.
What is government spending?
The Fed can adjust this which forces the banks to either hold more or less money in deposits determining how easy it is to loan out money.
What is the reserve requirement?
During a contractionary period, the Fed would likely do this to the discount rate.
What is decrease the rate?
In its current stretch, this is how long the federal government has been running a deficit.
What is 22-24 years?
This period of the business cycle is typically characterized by growth in real GDP and increased inflation.
What is the expansionary phase?
In order to fight inflation and reduce the federal debt the government may increase this.
What are taxes?
The Fed will buy and sell bonds to in order to affect the money supply. This is the name for the process/tool.
What is open market operations?
What is sell bonds?
It was the bursting of this bubble that helped the US slip into the Great Recession.
What is the Housing Bubble?