Measuring the Economy
What is the term for the general rise of prices
Inflation
Who protects individual deposits up to $250,000
FDIC
Federal Depositors Insurance Corporation
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 was the approximate Federal Deficit for fiscal year 2024
2 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 (Federal Income Tax)
Regressive (Gas Tax and Sales Tax)
Proportional (Property tax; Payroll Tax)
What is one way the US government attempts to protect US industries from foreign competition?
Protective tariffs
What is the official meaning of a Recession?
When GDP falls for 2 consecutive quarters
(6 months)
This measurement of the Economy was at 3.1% and increased to 3.2% according to the CPI
Inflation rate
Explain the Difference between the Discount Rate and the Federal Funds Rate
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
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
- GDP is growing
- Unemployment is relatively low
Stock Market is near a high
__________ increased at an annual rate of 2.9 percent in the last quarter
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
and
Contract the Economy
Contract: Increase Taxes & Decrease Spending
Absolute & Comparative Advantage Q
(on paper)
Some people might say there are 6 phases to a Business Cycle (not just 4). Draw a business cycle and label the 6 phases (starting with February 2020)
Peak; Contraction; Recession; Trough
Recovery; Expansion