FOMC Meeting
This is the Chair of the Federal Reserve of the United States.
Who is Jerome Powell?
True or False:
The price of 1 lb apples, which was $5 last month, is $6 today. The demand curve for apples must have shifted rightward between last month and today.
False: Supply could have shifted to the left, decreasing quantity sold and increasing price.
It's the percentage charged on borrowed money, often set by central banks.
What is an interest rate?
Essential for ensuring fresh ingredients arrive at the pizzeria on time and in the right quantities, this system encompasses the entire journey from suppliers to the pizza plate.
What is the pizzeria's supply chain?
This measures the market value of all final goods and services produced in the United States during a given period.
What is Gross Domestic Product or GDP?
The odds that we have a soft landing. (definitive, possibility, futile)
What is "a possibility"?
More info:
"will restore price stability to achieve an extended period of strong labor market conditions"
"the fact that we have come this far allows us to proceed carefully"
A good for which demand decreases as consumer income rises, contrary to the typical behavior.
What is an inferior good?
Examples: ramen, canned food, discount clothing
This market basket approach helps determine the inflation rate by comparing past year's prices with current prices.
What is the Consumer Price Index or CPI?
Mia noticed that even though she has not changed her prices, the purchasing power of a dollar spent at her establishment has decreased over the past year. This phenomenon can be attributed to what macroeconomic factor?
What is inflation?
This Scottish economist wrote "The Wealth of Nations" in 1776 and is often regarded as the father of modern economics.
Who is Adam Smith?
The growth in real GDP this year compared to expectations thus far. (above, consistent, or below)
What is above expectations?
The lowest legal price that can be paid in a market for goods and services, labor, or financial capital.
What is a price floor?
Central banks often raise interest rates to combat high inflation, relying on this economic theory which claims that as the price of borrowing increases, spending decreases.
What is the theory of contractionary monetary policy?
No: due to interest rates being very high, around 5.25% - 5.50%, it will be very expensive for Mia to borrow and open up her new location.
These are products with extremely inelastic demand. (name three)
What are tobacco products, coffee, gasoline, & prescription drugs?
The color of the tie of the main speaker of the FOMC meeting.
What is purple?
When the good is indicated as a relatively high responsiveness to price changes.
What is elastic?
This equation describes the relationship between nominal and real interest rates under the effect of inflation. The equation is i=r+π.
What is the Fisher Equation?
In an attempt to support local farmers, Mia began sourcing all her ingredients locally, contributing to the community's overall economic health. This strategy reflects the economic concept emphasizing the total market value of all final goods and services produced in an area.
What is Gross Local Product (GLP) or Local Gross Domestic Product (Local GDP)?
What is Gross Local Product (GLP) or Local Gross Domestic Product (Local GDP)?
The type of unemployment that results from new workers looking for their first job or workers transferring from an old to new position.
What is frictional unemployment?
This is the Fed's guidance of what the Federal Funds rate will be at the end of 2025.
What is 3.9%?
When two goods are consumed together like bread and butter and an increase in the price of one leads to a decrease in the demand for the other, these types of goods are described by this economic term.
What are complementary goods?
This curve claims an inverse relationship between unemployment and inflation, suggesting that as one rises, the other falls.
What is the Phillips Curve?
Explanation: When more people work, there is more power to spend, causing an increase in demand, leading to raised prices (inflation).
Observing that residents are eating out less frequently due to uncertainty about the future economy, the pizzeria understands this behavior is influenced by this macroeconomic component.
What is consumer confidence or consumer sentiment?
This term, beginning with "S," refers to mortgage-backed securities with high credit ratings that later proved to be high risk, playing a significant role in the 2008 financial meltdown.
What are Subprime Mortgages?