Debt Response
Business Cycle
Expansion
Inflation
Inflation Research
100
What is deficit spending?
When a government spends more money than it receives in revenue during a specific period of time.
100
What is an economic Business Cycle?
A business cycle is the cyclical pattern of economic activity in a country. It's characterized by alternating phases of expansion and contraction.
100
What is GDP?
Gross Domestic Product - a monetary measurement of a country's economic activity, calculated by adding up the value of all final goods and services produced in a specific time period
100
What is inflation?
The increase in the price of goods and services over a period of time
100
Why is raising the debt ceiling important?
It allows the Treasury to borrow funds to pay for government obligations that have already been incurred as the result of laws and budgets approved by the President and the Congress
200
What is the Federal Reserve and what does it actually do?
The Federal Reserve System is the central banking system of the United States and uses the system and the tools to set interest rates and regulate the money supply to accomplish its mandate of price stability and maximum employment.
200
Name 2 of the 4 main determinants to the Business Cycle.
Inventory Adjustments
Innovation
Monetary Factors
External Shocks
200
When recession is so severe, it leaves large numbers of people out of work, it is called ______?
depression
200
What is the term for the lowering of prices?
deflation
200
What are three major expenditure catagories that make up 54% of the Consumer Price Index?
Shelter, food, and energy
300
Explain Public and Private Spending
"Public spending" is governmental spending on services, while "private spending" is money spent by individuals or businesses on goods and services for their own personal use.
300
Describe the two elements of GROWTH phase in a Business Cycle?
Growth
Expansion- a period of time with extended economic growth
Peak- when economic growth reaches its highest point
300
What are business fluctuations?
Small changes in GDP which does not affect the overall business cycle
300
Name 2 of the 3 main causes of inflation.
Shortages occurring in sectors of economy
Labor costs rising
Increase in supply of money
300
What is CPI-U?
Consumer Price Index for All Urban Consumers, or CPI-U
400
Explain Public and Private Debt.
"Public debt" is the total amount of money a government owes to lenders, while "private debt" is the amount of money individuals or businesses owe to lenders.
400
Describe the two elements of DECLINATION phase in a Business Cycle?
Recession- a period of time with extended economic decline
Trough- when economic decline reaches its lowest point
400
Who was the most known president during The Great Depressionand WW2?
FDR - Franklin Delano Roosevelt
400
What is the formula for determining the inflation rate?
400
What price index does The Federal Reserve use to measure inflation?
Personal Consumption Expenditures, or PCE Index
500
What is the Crowding Out Effect Theory?
Increased government spending decreases or eliminates private sector spending, because the higher cost of loans and reduced income that can result when the government increases taxes or borrows revenue for its own spending.
500
What is a business cycle?
Large systematic rises (expansion) and declines (contraction) in the GDP creates a a cycle of fluctuations in the Gross Domestic Product (GDP) around its long-term natural growth rate over time.
500
Name at least 3 reasons for The Great Depression.
Stock market crash on October 29, 1929 “Black Tuesday”
theGDP fell from $103 to $55 billion
Severe unemployment
Bank deposits were not protected
People irresponsibly borrowed $
500
What are the degrees of inflation per year?
500
According to an economist, what are three, post pandemic reasons for our current inflation rate?
1. Increases in household demand and supply-chain
2. Shortages due to the pandemic
3. The war in Ukraine and the presence of a strong labor market.