Business Cycle
What is Real GDP.
The actual performance in an economy.
What are the three types of taxes.
What is Regressive, Progressive, and Proportional,
How is Price Stability measured?
What is By CPI and Inflation Rate
What does Unemployment not include.
Those under 16 years old, People in a mental institution, People who do not want to work, and Those who are not looking for employment.
which historical event led to the creation of the FED
A) PANIC OF 1911
B) PANIC OF 1929
C) PANIC OF 1907
D) PANIC AT THE DISCO
C) PANIC OF 1907
What part of the Business Cycle represents 'Growth' and is the recovery from a Trough.
What Is Expansion.
During a Contractionary Policy, what happens to taxes as Government spending goes down.
As Government spending goes down, Taxes will go up.
What are the four types of unemployment.
What Is Structural, Frictional, Cyclical, and Seasonal
what is the FOMC? What is its purpose?
Federal Open Market Committee; makes key decisions about interest rates and the growth of the United States money supply
end of Contraction, and start of an Expansion.
What Is the Trough.
What TOOLS does the Federal Reserve use to alter the money supply?
What Is Required Reserve Ratio, Interest & Discount Rate, and Open Market Operations
How is GDP Calculated? What are the components of the Output Expenditure Model?
Government (G), Consumer (C), Investment (I), Exports (X), and Imports (M).
GDP = C + I + G + (X - M)
What percentage of unemployment do economists consider FULL employment.
4 to 6 percent.
describe the structure of the FED
Member banks, 12 district banks, Board of Governors
The Business Cycle is made up of Business, Consumer, Government, Exports, and Imports. True or False.
False. It is made up of Expansion, Peak, Contraction/Recession, and Trough.
what happens to the monetary policy tools when an Easy Money Policy is implemented? Tight Money Policy?
RRR, discount rate, interest rate all go down
RRR, discount rate, interest rate all go up
What is CPI (Consumer Price Index)?
The change in the value of a basket of goods and services purchases by an average urban consumer.
Give an example of ONE type of unemployment.
Answers may vary.
To encourage spending to help the economy grow
If Old Navy closes all of its stores across the country, where would we find this on the business cycle?
trough
what is the difference between monetary policy and fiscal policy
monetary policy is any action taken by the FED to control a nation's overall money supply and achieve economic growth
fiscal policy is any action taken by the national government dealing with government spending and taxes to influence the economy
What are the three things needed for economic growth?
What is Technology, Resources, and Productivity
How is Unemployment Rate calculated.
Unemployment Rate / people in the Labor Force, x 100.
what are two effects of inflation?
reduces purchasing power, reduces value of savings