Monetary and Fiscal Policy
Government Policy that attempts to manage the economy by controlling the money supply
What is monetary policy?
Budget deficits occur when this is higher than government revenue over a given year.
What is government spending?
Tool used to determine the inflation rate by comparing past year prices with current prices.
What is the Consumer Price Index or CPI?
This is an example of a type of Progressive Tax.
What is Income Tax?
A period of reduced economic activity.
What is recession?
Government policy that attempts to manage the economy by controlling the money supply
What is monetary policy?
A fall in prices/rise in the value of money.
What is deflation?
This is an example of a type of Proportional Tax
What is property tax?
What is the 2008 financial crisis or Great Recession?
(both answers are acceptable)
The central bank of the United States
What is the federal reserve?
This country has the largest government debt in the world
What is the United States of America?
A rise in prices is effectively the same thing as this in wages.
What is a cut?
This is an example of a type of regressive tax.
What is sales tax?
Stagflation is a combination of these two words.
What is stagnation and inflation?
The percentage of deposits that banks must hold in reserve
What is reserve requirement?
This is the accumulation of all the federal government's budget deficits.
What is government debt?
When extreme demand for a product pushes that the price far beyond its economic value
What is a buble
These are the three levels of government that levy taxes.
What are federal, state, and local?
This was the peak rate of unemployment during the Great Depression.
What is roughly 25%?
While lowering taxes and raising government spending will expand the economy, it will also lead to this.
What is debt (long-term) or budget deficit (short term)?
(either answer is acceptable)
Value of all goods and services produced within a country over a year.
What is Gross Domestic Product (GDP)?
Demand-pull inflation is caused by an increase in aggregate demand, while cost-pull inflation is caused by an increase in this.
What is an increase in aggregate supply?
Government spending that is legally required.
What is mandatory spending?
When there are many more workers than available jobs this happens to wages.
What is a fall in wages?