Monetary Policy
______________ policy employs tools used by central bankers to keep a nation's economy stable while limiting inflation and unemployment. Expansionary monetary policy stimulates a receding economy and contractionary monetary policy slows down an inflationary economy. A nation's monetary policy is often coordinated with its fiscal policy.
Monetary policy
Where does our taxes go?
Tax dollars go to fund a variety of programs and services for the American people.
- Defense and security
- Social Security
- Health care
- Public assistance
- Interest on the national debt
- Transportation and infrastructure
Name one product that has been affected by inflation:
Groceries
Merchandise
Housing
etc...
True or False:
A low level of imports indicates robust domestic demand and a growing economy.
FALSE !!
A HIGH level of imports indicates robust domestic demand and a growing economy.
Who has the largest economy?
USA
True or False: The exchange rates between domestic and foreign currencies cannot be affected by monetary policy. With a decrease in the money supply, the domestic currency becomes cheaper than its foreign exchange.
FALSE!
The exchange rates between domestic and foreign currencies can be affected by monetary policy. With an increase in the money supply, the domestic currency becomes cheaper than its foreign exchange.
What is a tax rate?
A tax rate is a percentage at which the income of an individual or corporation is taxed.
Who benefits from inflation ?
Those with tangible assets may like to see some inflation as it raises the value of their assets.
9. A country's importing and exporting activity can influence its _________________, its exchange rate, and its level of ____________________ and interest rates.
A country's importing and exporting activity can influence its GDP, its exchange rate, and its level of inflation and interest rates.
True or False: The US national debt is at an all-time high
TRUE!!
True or False: An expansionary monetary policy decreases unemployment as a higher money supply and attractive interest rates stimulate business activities and expansion of the job market.
TRUE
Name a tax bracket:
10%
12%
22%
24%
32%
35%
37%
Name one type of inflation:
BONUS: (if you can name more) +100 for each
Inflation is classified into three types:
- demand-pull inflation
- cost-push inflation
- built-in inflation
What does GDP stand for:
BONUS +!00 Point what it is ?
Gross Domestic Product (GDP)
BONUS:
A measure of the total value of goods and services produced within a country's borders over a specific period of time.
About $_________ separates the middle class from the upper class
$100,000
Why Is the Federal Reserve Called a Lender of Last Resort?
a. Provides banks with liquidity and regulatory scrutiny to prevent them from failing and creating financial panic in the economy.
b. The Federal Open Market Committee of the Federal Reserve meets eight times a year to determine changes to the nation's monetary policies.
c. Inflation
a. Provides banks with liquidity and regulatory scrutiny to prevent them from failing and creating financial panic in the economy.
What tax bracket would a single individual fall under if they are making $39,551 (New York’s average income) ?
A. 12%
B. 22%
C. 24%
D. 35%
C. 12%
Name one PRO & one CON of Inflation:
Pros
Leads to higher resale value of assets
Optimum levels of inflation encourage spending
Cons
Buyers have to pay more for products and services
Imposes higher prices on the economy
Drives some prices up first and others later
What Are the Benefits of Exporting?
When exports outpace imports, this is a trade surplus and often is a sign that U.S. manufacturers are doing good business, which should lead to strong employment.
Trade Surplus + Good Business = Strong Employment
The unemployment rate for college graduates is _______% For high school dropouts, it's_____%
a. 2.9% | 5%
B. 13% | 15%
C. 3.9% | 13%
C. 3.9% | 13%
The unemployment rate for college graduates is
3.9%. For high school dropouts, it's 13%.
____________ commonly uses three strategies for monetary policy including reserve requirements, the discount rate, and open market operations.
A. Open Market Operations
B. Interest rates
C. The Federal Reserve
C. The Federal Reserve
What tax bracket would a head of household fall under if they are making $144,000 a year?
A. 10%
B. 22%
C. 24%
D. 37%
C. 24%
What Is Inflation?
Inflation is a gradual loss of purchasing power that is reflected in a broad rise in prices for goods and services over time.
Is Importing or Exporting Better for an Economy?
It's not a matter of one being better or worse than the other. In a healthy economy, both imports and exports are experiencing growth.
Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $______!
A. $377,098!
B. $393,839!
C. $344,145!
B. $393,839!