The use of government spending and taxation to influence the level of economic growth and inflation.
What is Fiscal Policy?
100
Money that is not backed by any other good (like gold).
What is fiat money?
100
This is the central bank of the United States.
What is the Federal Reserve?
100
A situation with high unemployment, low output, and low prices.
What is a recession?
100
This is the reason why countries export goods.
What is 'they have a comparative advantage in production"?
200
This indirectly affects real GDP by changing consumption.
What is taxes?
200
Both parties have to want what the other party has for barter to take place.
What is double coincidence of wants?
200
This is the technical term used when the Fed changes money supply in the economy.
What is monetary policy?
200
In a recession, this is the type of fiscal policy used to help the economy.
What is an expansionary fiscal policy?
200
This is the reason why workers in industrial countries earn much higher wages than workers in developing countries.
What is there is higher productivity of labor in industrial countries.
300
These 2 components of real GDP are affected by fiscal policy.
What is government spending and consumption?
300
The ability of an asset to be exchanged for goods and services.
What is liquidity?
300
The Fed can increase money supply by doing this to the required reserve.
What is decreasing the required reserve?
300
This type of policy Lowers money supply and causing interest rates to increase in the economy.
What is contractionary monetary policy?
300
When the opportunity cost of producing a good in terms of the forgone output of other goods is lower than that of other countries.
What is having a comparative advantage?
400
An element of fiscal policy that automatically changes in value as real GDP changes.
What is an automatic stabilizer?
400
This is the reserve that banks are allowed to use in generating new loans.
What is the excess reserve?
400
The Fed can decrease the money supply by conducting this type of open market operations.
What is selling government debts/bonds?
400
The reason why expansionary policies are more popular.
What is dynamic inconsistency?
400
A type of trade restrictions that make domestic producers better off because they can sell more goods at higher price and the government collects extra revenue from taxes.
What is a tariff?
500
Domestic investment is reduced when this happens. (a side effect of fiscal policy)
What is the crowding out effect?
500
If the reserve requirement is 25 percent, this amount is the money multiplier.
What is 4?
500
This is the current chairperson (head honcho) of the Fed.
Who is Janet Yellen?
500
If these 2 problems happen simultaneously, fiscal and monetary policy cannot solve both.
What is high inflation and high unemployment?
500
A free trade situation where the domestic consumer is better off and the domestic producer is worse off.