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EPF Unit 2 - Business Cycles, Economic Indicators, Fiscal and Monetary Policy Flashcards | StudBud
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EPF Unit 2 - Business Cycles, Economic Indicators, Fiscal and Monetary Policy
EPF Unit 2 - Business Cycles, Economic Indicators, Fiscal and Monetary Policy
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Fiscal and Monetary Policy #fiscalpolicy #monetarypolicy
Flashcards
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Questions
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Answers
1
When the the GDP is at the lowest point
expansion
trough
contraction
peak
2
At what two business cycle phases does the government want to stimulate the economy?
Contraction and Trough
Contraction and Peak
Expansion and Trough
Expansion and Peak
3
The economy is in a recession when...
A contraction occurs
The contraction lasts for more than 2 quarters (6 months)
The contraction lasts 1 quarter (3 months)
A trough
4
What is the government trying to accomplish when? - The Fed lowers the discount rate
Slow Down the Economy
Stimulate the Economy
5
What is the government trying to accomplish when? - The government buys bonds from investors
Stimulate the Economy
Slow Down the Economy
6
What is the government trying to accomplish when? - The Fed decreases the reserve requirement
Stimulate the Economy
Slow Down the Economy
7
What is happening to the economy during the Trough of a Business Cycle?
Both B and C
Decrease in CPI
High Unemployment
Inflation
8
What is the term for how the government regulates the amount of money in circulation?
Contractionary Policy
Fiscal Policy
Expansionary Policy
Monetary Policy
9
During this phase of the business cycle, output and unemployment decrease
peak
expansion
contraction
trough
10
What is the business cycle?
the exchange of goods between different nations
fluctuations in a country’s economic activity over time
Tendancy of new business to get larger each year
the flow of money between households and businesses
11
What is the term for the amount of money the government requires the bank to keep as a deposit?
Reserve Requirement
Interest Rate
Discount Rate
Minimum Deposit
12
What is the government trying to accomplish when? - The Fed raises the interest rate
Stimulate the Economy
Slow Down the Economy
13
What is the term for the rate a bank has to pay to borrow money from its reserve bank?
Interest Rate
Monetary Rate
Rate of Return
Discount Rate
14
The typical business cycle has all of the following EXCEPT
Expansion
Peel
trough
contraction
15
During this phase of the business cycle, output is at a high point
contraction
expansion
trough
peak
16
What is the term for the rate a person or organization must pay to borrow money from a bank?
Return Rate
Discount Rate
Interest Rate
Monetary Rate
17
What is the government trying to accomplish when? - The Fed expands the money supply
Stimulate the Economy
Slow Down the Economy
18
The value of currency expressed in terms of the amount of goods or services a dollar can buy
currency
purchasing power
CPI
inflation
19
When people, groups, or nations invest money in U.S. government, they usually do so by buying
U.S. Bonds.
U.S. Stock.
U.S. Dollars.
U.S. Dividends
20
What is the government trying to accomplish when? - The Fed increases the reserve requirement
Slow Down the Economy
Stimulate the Economy
21
When the economy has reached its maximum level of growth...
trough
contraction
peak
expansion
22
What is the term for how the government taxes and spends money?
Expansionary Policy
Fiscal Policy
Contractionary Policy
Monetary Policy
23
At what two business cycle phases does the government want to slow the economy down?
Contraction and Trough
Contraction and Peak
Expansion and Peak
Expansion and Trough
24
6 consecutive months of declining output is called a
recession
depression
deflation
super contraction
25
During this phase of the business cycle, prices are increasing
peak
trough
expansion
contraction
26
What is the government trying to accomplish when? - The Fed sells bonds to investors
Slow Down the Economy
Stimulate the Economy
27
What branches of government create and implement fiscal policy?
Legislative and Executive
Legislative and Judicial
Judicial and Executive
28
What regulatory agency controls monetary policy by regulating the nation's banks?
Federal Trade Commission
Federal Reserve
Securities and Exchange Commission
Internal Revenue Service
29
How many banking districts is the Federal Reserve divided into?
6
25
12
50
30
What is the government trying to accomplish when? - The Fed decreases the money supply
Slow Down the Economy
Stimulate the Economy
31
What is the government trying to accomplish when? - The Fed lowers the interest rates
Stimulate the Economy
Slow Down the Economy
32
What is the government trying to accomplish when? - The Fed Raises the discount rate
Stimulate the Economy
Slow Down the Economy
33
When unemployment is at the lowest point
peak
contraction
trough
expansion
