Measuring the Economy
What is the term for the general rise of prices
Inflation
The FDIC protects bank deposits up to this level
$250,000
Explain the difference b/w the Federal Deficit and the Federal Debt
Deficit is overspending in one Fiscal Year
Debt is the total amount we owe (total of all the deficits)
What is the danger of Loose Money policies?
What is the danger of Tight Money policies
Inflation
Unemployment
What does the Business Cycle track / follow?
Real GDP
Identify 4 distinct ways to measure the health of the US Economy
Inflation
GDP
Unemployment
Stock Market
(Personal Income; Housing; etc)
Name the 3 "functions" of money
Medium of Exchange
Store of Value
Measure of Value (unit of account)
What are the two variables that Congress can control with Fiscal Policy?
Raise / Lower Taxes
Raise Lower Government Spending
What (approximately) is the current Federal Debt
40 Trillion Dollars
How is "Real GDP" different than GDP?
Real GDP eliminates inflation
(helps to compare GDP more accurately over time)
Name the 4 types of Unemployment (in any order)
Frictional
Seasonal
Cyclical
Structural
What 3 tools does the Fed use when it engages in Monetary Policy?
Interest Rates
Reserve Requirements
Government Securities
What are the 3 major TYPES / CATEGORIES of taxes
Progressive
Regressive
Proportional
What was the approximate Federal Deficit for fiscal year 2025
2 Trillion
What is the official meaning of a Recession?
When GDP falls for 2 consecutive quarters
(6 months)
Due to the ______ at 3.4%, the Fed increased the Federal Funds Rate by .25%
Inflation rate
Explain either the Discount Rate
or
The Federal Funds rate
Discount Rate = What The Fed charges banks for loans
Fed Funds Rate = The recommended interest rate range that banks charge each other
Identify examples of 3 federal taxes and explain each one
Federal Income Tax & Corporate Income tax
Tariffs
Excise Tax
Payroll tax
Estate tax
Capital Gains Tax
Identify the 1 NC (state) taxes
and 1 local tax
NC Sales Tax
NC State Income Tax
NC Corporate Income Tax
NC Excise tax (on gas or cigarettes)
PROPERTY Tax = Local; (also a local add-on to sales tax)
What phase of the Business Cycle are we in currently and provide 1 piece of evidence to support your answer
Expansion
- Real GDP is growing
- Unemployment is relatively low
Stock Market is near a high
The second quarter _______ slowed to a growth rate of 1.6% percent in the second quarter of 2026
GDP (Real GDP)
What are the 3 actions the Fed would take to speed up the economy if we slipped into a recession?
Lower Interest Rates
Lower Reserve Requirements
Buy T-Bills
Explain what Congress would do Fiscal Policy to Expand the Economy (Expansionary Policy)
and
Contract the Economy (Contractionary Policy)
Expand: Lower Taxes & Increase Gov't Spending
Contract: Increase Taxes & Decrease Gov't Spending
What is one way the US government attempts to protect US industries from foreign competition?
Protective Tariffs
Some people might say there are 6 phases to a Business Cycle (not just 4). Draw a business cycle and label the 6 phases
Peak; Contraction; Recession; Trough
Recovery; Expansion