Unit 3 Economics Test Answers – Flashcards

Unlock all answers in this set

Unlock answers
question
GDP
answer
The total dollar amount of all final goods and services produced within a country's boarders
question
Recession
answer
Decline in the real GDP
question
Business cycle
answer
Systematic changes in the real GDP marked by alternating periods of expansion and contraction
question
Expansion
answer
Period of growth in GDP
question
Fiscal policy
answer
Policies involving government spending and taxes
question
Keynesian economics
answer
The use of fiscal policy to help grow the economy
question
Automatic stabilizers
answer
Programs that automatically trigger benefits as soon as you qualify due to a downturn in your personal economic life
question
Economic indicators
answer
Statistics used to measure current conditions as well as to forecast financial or economic trends
question
Leading
answer
Measurable economic factor that changes before the economy starts to follow a pattern
question
Coincident
answer
Economic factor that varies directly and simultaneously with the business cycle
question
Lagging
answer
Measurable economic factor that changes after the economy has already begun to follow a particular pattern
question
Inflation
answer
The overall increase in prices
question
Consumer price index
answer
How people measure inflation
question
Demand pull
answer
Increase in demand, but not an increase in supply, causing prices to rise
question
Cost push
answer
Rising production costs push businesses to raise the price of their goods
question
Unemployed
answer
People available for work who made a specific effort to find a job
question
Unemployment rate
answer
The number of unemployed people divided by the total number of persons in the civilian workforce
question
Frictional unemployment
answer
Caused by personal problems such as being fired
question
Structural unemployment
answer
Job is eliminated because it is obsolete. Think technology.
question
Cyclical unemployment
answer
Related to swings in the economy
question
Seasonal unemployment
answer
Caused by regular changed in demand throughout the year
question
Monetary policy
answer
Controlling the expansion/contraction of the money supply to influence the cost and availability of credit
question
Reserve requirements
answer
Banks are not aloud to lend out all their money
question
Open market operations
answer
Method used by the FED to change the amount of money in the economy
question
Federals fund rate
answer
The rate that banks pay when they borrow from other banks
question
Discount rate
answer
The rate that banks pay when they borrow from the FED
question
Prime rate
answer
The interest rate that banks lend to the most credit worthy customers
Get an explanation on any task
Get unstuck with the help of our AI assistant in seconds
New