Economic Indicators
GDP, easy as 1-2-3!
GDP is comprised of these four categories.
What are consumer spending, investment spending, government spending, and net exports?
An increase in investment spending across the economy will shift this curve.
What is aggregate demand?
This is the money multiplier if the reserve ratio is 0.1.
What is 10?
1 / rr = Money multiplier
1/0.1 = 10
This is what will happen to the value of the Canadian dollar if interest rates decrease in Canada.
What is depreciation?
When people save less money, it has this effect on the loanable funds market.
What is a decrease in the supply of loanable funds?
Kendrick works at DVD store. He loses his job with the advent of streaming services. Kendrick is experiencing this type of unemployment.
What is structural unemployment?
This is an example of an automatic stabilizer.
Acceptable answers:
What is a progressive tax system?
What are unemployment benefits/other welfare programs?
(Other answers at Mr. R's discretion... no pun intended)
This type of currency is not backed by any commodity or inherent worth; its value comes from being declared currency by a government.
What is fiat currency/fiat money?
The exchange rate for Euros is 2 dollars per Euro. This is the exchange rate for dollars.
What a handsome fella!
Also known as the "chair with the hair," this man is the current Chair of the Federal Reserve Bank of the United States.
Who is Jerome Powell?
The nominal GDP is $1,000 and the GDP deflator is 2.0. This is the real GDP.
What is $500?
Real = nominal / deflator
What is crowding out?
This is the open market operation that would help close an inflationary gap.
What is to sell bonds?
If the economy moves into a recessionary gap, we will slide in this direction along the short run Phillips curve.
What is to the right?
Deacon is in jail. For purposes of calculating the economy's unemployment rate, Deacon is counted in this category.
What is "not in labor force?"
This is the reason that the reported unemployment rate may understate the actual unemployment problem.
What is the discouraged workers problem?
OR, what is the part-time workers problem?
Expansionary fiscal policy is most likely to have this impact on the national debt.
What is to increase it?
In an ample reserve system, increasing the supply of reserves will have this effect on interest rates.
What is none?
Due to mysterious circumstances, the LRAS curve has shifted to the left. The PPC has shifted in this direction.
What is inward?
Mr. Da Silva buys a Japanese government bond. This transaction has the following effect on the U.S. Balance of Payments.
What is a debit to the capital/financial account?
This is the name of collection of goods and services whose price is measured annually for purposes of calculating inflation.
What is a market basket?
The MPC is 0.8. This is the tax cut that will close a $1 million recessionary gap.
What is a $250,000 tax cut?
These are the two goals of the Federal Reserve stipulated in its "dual mandate."
What is full employment and 2% inflation?
If a country devalues its currency, this means it is trying to help this specific economic group.
Who are exporters?
Tariffs have a negative impact on these two specific economic groups.
Who are domestic consumers and foreign companies?