The Business Cycle
What is the three letter abbreviation used to represent the total value of all goods and services produced in a country in one year?
GDP
Fiscal policy is the use of taxing and spending to influence the economy, and it is controlled by who?
The government (congress and the president)
The Fed's job is to keep the economy stable using this specific type of policy.
Monetary Policy
This local tax is placed on the value of the land or home you own, and it pays for schools.
Property Tax
He serves as the commander of the Continental Army and became the first President of the United States
George Washington
This is the highest point of the business cycle where the economy is at its best that cycle.
Peak
This budget state occurs when the government spends (expenditures) more money than it collects (revenue) in a single year.
Budget Deficit
When the Fed raises interest rates to fight inflation, it makes borrowing expensive and forces people to do this.
Spend less
The Federal Income Tax is an example of this type of tax, where the more money you make, the higher percentage you pay.
Progressive Tax
This document, primarily written by Thomas Jefferson and adopted on July 4, 1776, announced the colonies' separation from Great Britain
Declaration of Independence
This Phase of the business cycle happens when the economy shrinks, meaning GDP falls for at least 6 months and unemployment goes up.
Recession
While the deficit is the shortfall for just one year, this term describes the total of all yearly deficits added together over time.
National (Federal) Debt
The Federal Reserve's main tool for managing the economy is changing these, which act as the fee paid for borrowing money.
What are Interest Rates?
A Sales Tax is considered this type of tax because a flat gee hurts a poor person's budget much more than a millionaire's, taking a larger percentage of a low-income person's money.
Regressive Tax
This 16th President led the nation through the American Civil War and issued the Emancipation Proclamation
Abraham Lincoln
This economic problem occurs when the general prices of goods and services go up, making your money worth less.
Inflation
When the government has a deficit, it must borrow money by selling these "I.O.U.s" to people and other countries.
Bonds
If the economy is experiencing a recession, the Fed will do this to interest rates to make borrowing money cheap and encourage loans.
Lower them
National Defense, NASA, and Education are examples of this type of spending that congress has the choice to raise or lower, and must vote on every single year.
Discretionary Spending
The United States officially entered World War II following the December 1941 surprise attack on this naval base
Pearl Harbor
This represents the lowest point, or "rock bottom," of the business cycle before the economy starts to recover and grow again.
Trough
The Progressive Income Tax and Unemployment Insurance are examples of these programs, which start working without any new laws being passed.
Automatic Stabilizers
If there is high inflation and prices are rising, the Fed will do this to interest rates to make borrowing expensive and slow down the spending.
Raise them
Social Security and Medicare fall under this spending category, which means the money is required by law to be spent automatically without a yearly vote.
Mandatory Spending
This massive 1803 land deal with France, championed by Thomas Jefferson, effectively doubled the size of the United States
Louisiana Purchase