Measuring the Economy
What is the term for the general rise of prices
Inflation
The full name of the nation's central bank
The Federal Reserve Bank (or Federal Reserve Banking System)
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)
Explain the difference between Imports and Exports
Imports are goods brought into the country
Exports are US goods that go to other countries
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 is the danger of Loose Money policies?
What is the danger of Tight Money policies
Inflation
Unemployment
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
What are the 3 tools the Fed would use to speed up the economy if we slipped into a recession?
Lower Interest Rates
Lower Reserve Requirements
Buy T-Bills
Identify examples of 3 federal taxes and explain each one
Federal Income Tax & Corporate Income tax
Tariffs
Excise Tax
Payroll tax
Estate tax
What is a "Favorable Balance of Trade"
When Exports are more than Imports
(A trade Surplus)
What phase of the Business Cycle are we in currently and provide 2 pieces of evidence to support your answer
Expansion
- GDP is growing (latest figures were 3% growth)
- Unemployment is low (3.1% nationally)
__________ increased at an annual rate of 3.2 percent in the fourth quarter of 2023
Real GDP
Who protects individual deposits up to $250,000
"FDIC"
Federal Depositors Insurance Corporation
Explain the difference b/w Mandatory Spending and Discretionary Spending AND provide an example of each
Mandatory (SS; Medicare; Medicaid)
Discretionary (Military; Infrastructure; Nat'l Parks, etc)
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)
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