Fiscal Policies
What is fiscal policy
Government adjustments to spending levels and tax rates to influence a nation's economy
What are the four main types of market structures?
Perfect competition, monopolistic competition, oligopoly, and monopoly.
What is the primary tool the Federal Reserve uses to control the money supply?
Open market operations
This describes a sustained increase in the general price of goods within an economy over time
Inflation
American currency
USD
What is the difference between a budget deficit and a budget surplus
A deficit occurs when government spending exceeds revenue, while a surplus occurs when revenue exceeds spending
What characterizes a perfectly competitive market?
Many sellers, identical products, no barriers to entry, and perfect information
Define the federal funds rate
The interest rate at which banks lend reserves to each other overnight
This describes the precent change in the price level over a year
Inflation rate
Currency of England
British pound
What is the Consumer Price Index (CPI)
A measure that examines the weighted average of prices of a basket of consumer goods and services
What is a natural monopoly?
A natural monopoly occurs when a single firm can supply the entire market at a lower cost than multiple firms.
What are reserve requirements
The minimum amount of reserves that banks must hold against depositsThe minimum amount of reserves that banks must hold against deposits
This tracks the changes in prices of basket of goods purchased
CPI
Japan currency
Japanese yen
Define unemployment rate
The percentage of the labor force that is jobless and actively looking for work
How do firms in monopolistic competition differentiate their products
Through branding, quality, features, and advertising
How do contractionary monetary policies affect interest rates
Increase interest rates
This is caused by increases in production costs, such as wages, which leads to higher prices for goods and services
cost-push inflation
Currency for Taiwan
New Taiwan Dollar
What is stagflation
A situation where the economy experiences stagnant growth, high unemployment, and high inflation simultaneously
What is game theory and in which market structure is it most relevant
Game theory is the study of strategic decision making, most relevant in oligopoly.
How do expansionary monetary policies affect the money supply
increase the money supply
This occurs when the demand for goods exceeds supply which causes price levels to increase
demand-pull inflation
Currency in Democratic Republic of Congo
Congolese Franc