Fiscal Policy
This 2008 legislation, passed in response to the Great Recession, included tax cuts and government spending totaling $787 billion.
What was the American Recovery and Reinvestment Act (or the stimulus package)?
This is the term for the amount of a good or service that consumers are willing and able to purchase at various prices.
What is demand?
This is the central bank of the United States, responsible for conducting monetary policy.
What is the Federal Reserve (or the Fed)?
This economic system relies on supply and demand with little government intervention, where individuals and businesses make most economic decisions.
What is a market economy?
Ray Kroc
Who is the so-called founder of McDonald's?
This term describes when the government spends more money than it collects in taxes during a fiscal year.
What is a budget deficit?
This is the point on a graph where the supply curve and demand curve intersect, determining the market price.
What is equilibrium?
When the Fed uses expansionary policy, interest rates do this, making it cheaper for consumers and businesses to borrow money.
What is decrease (or fall/go down)?
This economic system combines elements of both market and command economies, with both private businesses and government involvement.
What is a mixed economy?
This percentage measures how many people in the labor force are actively seeking work but cannot find jobs.
What is the unemployment rate?
This type of fiscal policy involves increasing government spending or cutting taxes to stimulate economic growth during a recession.
What is expansionary fiscal policy?
These are two goods that are used together, like peanut butter and jelly or cars and gasoline.
What are complementary goods (or complements)?
This is the percentage of deposits that banks are required to keep on hand and cannot loan out.
What is the reserve requirement (or required reserve ratio)?
This type of economy typically has the most economic freedom for individuals and businesses.
What is a market economy?
This economic indicator measures the total value of all final goods and services produced within a country's borders during a specific time period.
What is Gross Domestic Product (or GDP)?
This type of fiscal policy involves raising taxes or cutting government spending to slow down an overheating economy and control inflation.
What is contractionary fiscal policy?
This occurs when the quantity supplied exceeds the quantity demanded at the current price, putting downward pressure on prices.
What is a surplus?
This problem occurs when the Fed keeps interest rates too low for too long, causing prices to rise throughout the economy.
What is inflation?
This traditional economic system relies on customs, habits, and beliefs passed down through generations to answer economic questions.
What is a traditional economy?
This type of unemployment occurs when workers' skills don't match available jobs or when workers are geographically separated from job opportunities.
What is structural unemployment?
This term describes the additional economic activity generated when government spending increases, as recipients spend their income, creating more income for others.
What is the multiplier effect?
During the COVID-19 pandemic, demand for hand sanitizer and toilet paper increased dramatically, causing these two market phenomena to occur.
What are shortages and higher prices?
During this economic crisis that began in 2007-2008, the Fed lowered interest rates to near zero to stimulate the economy.
What was the Great Recession (or Financial Crisis)?
This country has experienced severe economic crisis and hyperinflation due to mismanagement of its socialist command economy and oil dependence.
What is Venezuela?
This economic cycle consists of four phases: expansion, peak, contraction, and trough.
What is the business cycle?