Economics Unit 5 Answers – Flashcards

question
The Federal Government's attempt to stabilize the economy through taxing and government spending.
answer
Fiscal Policy
question
A graph showing the amount of real GDP that could be produced at various price levels.
answer
Aggregate Supply Curve
question
A regulation making it illegal for businesses to give workers raises or to raise prices without the explicit permission of the government
answer
Wage-price controls
question
The total quantity of goods demanded at various price levels.
answer
Aggregate Demand
question
The three-member group that reports on the economic developments to the president.
answer
Council of Economic Advisers
question
The difference between the actual GDP and the potential GDP that could be produced if all resources were fully employed.
answer
GDP gap
question
This theory includes actions to lower unemployment by stimulating aggregate demand
answer
Keynesian economics
question
The emphasis on the role of money and its growth as a key to controlling inflation and unemployment.
answer
Monetarism
question
A graph showing the quantity of real GDP that would be purchased at each possible price level.
answer
Aggregate demand curve
question
The interest rate that the Fed charges on loans to financial institutions
answer
Discount rate
question
The deposit a member bank keeps at the Fed.
answer
Member bank reserve
question
Policy in which the Fed plans to allow the money supply to grow and interest rates to fall.
answer
Easy money policy
question
This is the market rate of interest minus the rate of inflation.
answer
Real rate of interest
question
The law giving the Fed authority to extend the truth- in-lending disclosures to people borrowing from corporations, retail stores, auto dealers and lending inst.
answer
Regulation Z
question
This group advises the President on economic developments and strategy.
answer
Council of Economic Advisers
question
Which type of economics would deregulation be most closely associated with?
answer
Supply-side economics
question
The government is the only sector large enough to counter decreased investment spending is a statement of which type of economics
answer
Keynesian economics
question
What effect will an increase in production costs have on aggregate supply?
answer
Decrease aggregate supply
question
Which of the following can economist provide insight into using Aggregate supply and demand: employment, inflation, recession, or all ?
answer
All of the above
question
One consequence of allowing an independent body to manage the nation's monetary policy is that these policies are often criticized by __________
answer
Politicians
question
Supply-side economics advocates ____________ government involvement in business.
answer
Reduced
question
According to the Keynes' theory of the multiplier- accelerator effect, what will a decline in investment spending lead to?
answer
Recessionary economic activity
question
__________ __________ refers to expenditures, taxation, and borrowing made by a government to influence the economy.
answer
Fiscal policy
question
A comprehensive measure of consumer discomfort during a period of rising inflation and high unemployment.
answer
Misery index
question
Wages adjusted for inflation are know as?
answer
Real wages
question
___________ are changes in the economy that shift the aggregate demand or supply curve.
answer
Determinants
question
Raising personal income tax rates is reserved for the U.S. Congress to impact what?
answer
Fiscal policy
question
Which part of the Federal Reserve decides whether to raise or lower interest rates to control money supply?
answer
Board of Governors
question
Which of the following is M1: Money market funds, savings deposits, traveler's checks and currency, or investment stocks?
answer
Traveler's checks and currency
question
The primary monetary policy making body of the Federal Reserve is?
answer
Federal Open Market Committee
question
Unlike short-term politicians, the Federal Reserve employees are concerned with the _________-_______ health of the economy.
answer
Long-run
question
If the Federal Reserve is buying bonds on the open market, what economic problem are they trying to correct?
answer
High Inflation
question
The Board of Governors is made up of how many members to regulate and supervise the Federal Reserve?
answer
Seven
question
12 District bank and regional member banks combine to make up the corporation known as?
answer
The Federal Reserve
question
If the Federal Reserve raises the discount rate, or cost of borrowing, what will banks likely do?
answer
Raise their loan interest rates to borrowers
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question
The Federal Government's attempt to stabilize the economy through taxing and government spending.
answer
Fiscal Policy
question
A graph showing the amount of real GDP that could be produced at various price levels.
answer
Aggregate Supply Curve
question
A regulation making it illegal for businesses to give workers raises or to raise prices without the explicit permission of the government
answer
Wage-price controls
question
The total quantity of goods demanded at various price levels.
answer
Aggregate Demand
question
The three-member group that reports on the economic developments to the president.
answer
Council of Economic Advisers
question
The difference between the actual GDP and the potential GDP that could be produced if all resources were fully employed.
answer
GDP gap
question
This theory includes actions to lower unemployment by stimulating aggregate demand
answer
Keynesian economics
question
The emphasis on the role of money and its growth as a key to controlling inflation and unemployment.
answer
Monetarism
question
A graph showing the quantity of real GDP that would be purchased at each possible price level.
answer
Aggregate demand curve
question
The interest rate that the Fed charges on loans to financial institutions
answer
Discount rate
question
The deposit a member bank keeps at the Fed.
answer
Member bank reserve
question
Policy in which the Fed plans to allow the money supply to grow and interest rates to fall.
answer
Easy money policy
question
This is the market rate of interest minus the rate of inflation.
answer
Real rate of interest
question
The law giving the Fed authority to extend the truth- in-lending disclosures to people borrowing from corporations, retail stores, auto dealers and lending inst.
answer
Regulation Z
question
This group advises the President on economic developments and strategy.
answer
Council of Economic Advisers
question
Which type of economics would deregulation be most closely associated with?
answer
Supply-side economics
question
The government is the only sector large enough to counter decreased investment spending is a statement of which type of economics
answer
Keynesian economics
question
What effect will an increase in production costs have on aggregate supply?
answer
Decrease aggregate supply
question
Which of the following can economist provide insight into using Aggregate supply and demand: employment, inflation, recession, or all ?
answer
All of the above
question
One consequence of allowing an independent body to manage the nation's monetary policy is that these policies are often criticized by __________
answer
Politicians
question
Supply-side economics advocates ____________ government involvement in business.
answer
Reduced
question
According to the Keynes' theory of the multiplier- accelerator effect, what will a decline in investment spending lead to?
answer
Recessionary economic activity
question
__________ __________ refers to expenditures, taxation, and borrowing made by a government to influence the economy.
answer
Fiscal policy
question
A comprehensive measure of consumer discomfort during a period of rising inflation and high unemployment.
answer
Misery index
question
Wages adjusted for inflation are know as?
answer
Real wages
question
___________ are changes in the economy that shift the aggregate demand or supply curve.
answer
Determinants
question
Raising personal income tax rates is reserved for the U.S. Congress to impact what?
answer
Fiscal policy
question
Which part of the Federal Reserve decides whether to raise or lower interest rates to control money supply?
answer
Board of Governors
question
Which of the following is M1: Money market funds, savings deposits, traveler's checks and currency, or investment stocks?
answer
Traveler's checks and currency
question
The primary monetary policy making body of the Federal Reserve is?
answer
Federal Open Market Committee
question
Unlike short-term politicians, the Federal Reserve employees are concerned with the _________-_______ health of the economy.
answer
Long-run
question
If the Federal Reserve is buying bonds on the open market, what economic problem are they trying to correct?
answer
High Inflation
question
The Board of Governors is made up of how many members to regulate and supervise the Federal Reserve?
answer
Seven
question
12 District bank and regional member banks combine to make up the corporation known as?
answer
The Federal Reserve
question
If the Federal Reserve raises the discount rate, or cost of borrowing, what will banks likely do?
answer
Raise their loan interest rates to borrowers