Vocabulary
The document indicating the amount of money the government expects to receive for a year and authorizing the amount of money that the government can spend that year:
What is Federal Budget?
Aggregate definition:
what is Total/all?
The two tools of fiscal policy:
What are: government spending and taxation?
The three tools of monetary policy:
What are open market operations, discount rates and reserve requirements?
The study of the behavior and decision making of the economy:
What is macroeconomics?
The percentage on income paid in taxes ( it decreases as income increases and hurts poorer people)
What is Progressive Taxes?
The policy that fixes the issue of pessimistic consumers in a contraction
what is Expansionary FP or MP?
In order to stimulate a recession, the government will use this policy to increase spending, cut taxes and encourage transfer payments (Ex of transfer payments: social security and welfare):
What is Expansionary Fiscal Policy?
this supervises the sale and purchase of bonds:
What is the federal open market committee?
Oh no! Austin is fired from his job :( ! he looks for a job for 7 months and then gives up. What is Austin considered after he gives up?
What is A Discouraged worker?
1. Revenue exceeds expenditures
2. expenditures exceed revenues
What is Budget surplus and budget deficit?
The two problems aggregate demand must fix
What is Unemployment and inflation?
By implementing this policy we want people to feel like they have LESS money and Aggregate demand to decrease
What is contractionary fiscal policy?
This is a policy called EASY money and it is used in a contraction to fix the issue of unemployment and increase AD
What is Expansionary Monetary Policy?
Name this formula:
Year 1 price X Year 2 quantity
What is Real GDP?
The percentage of income paid in taxes (that remains the same for all income levels AKA the flat rate)
What are proportional taxes?
This happens to the aggregate demand curve when there is a decrease in TOTAL demand for goods and services
What is leftward shift?
what is the only type of unemployment fiscal policy cannot fix?
What is cyclical?
Oversees the FED in DC
what is the board of governors?
How to calculate inflation?
CPI= ( Current year price/ Base year price) X100
The average amount of money spent on the SAME items each year
What is market basket?
this is Caused by a change in the price level which affects the quantity of REAL output demand
what is A Movement along the Aggregate demand curve?
decreasing government spending would be
what is contractionary fiscal policy?
the interest rates the FED charges on loans to BANKS
What is the discount rate?
Calculate the UNEMPLOYMENT rate for the following situation:
Labor force: 36 million; unemployed: .7 million
What is : .7/ 36 X100 = 1.9%