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Unit 4 Exam

Unit 4 Exam. GDP/Inflation/Unemployment Monetary & Fiscal Policy. Who creates fiscal policy? Government Congress & President. What monetary policy tool is the Fed using when it sells government bonds? Open Market Operations. What rate of inflation is a single-digit inflation rate?

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Unit 4 Exam

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  1. Unit 4 Exam GDP/Inflation/Unemployment Monetary & Fiscal Policy

  2. Who creates fiscal policy? • Government • Congress & President

  3. What monetary policy tool is the Fed using when it sells government bonds? • Open Market Operations

  4. What rate of inflation is a single-digit inflation rate? • Creeping

  5. Due to this, the dollar buys less: • Inflation

  6. What term best describes the period between March and October, 2009? Deflation

  7. In how long does a person need to have inquired after a job to be counted a part of the unemployment rate? • 1 month

  8. Current GDP is: • $16 trillion

  9. Inflation rate of 14% is considered: • Galloping inflation

  10. To exercise contractionary fiscal policy, what would the government do about the tax rate? • Raise it

  11. What effect would an easy money policy have on unemployment? • Lower it

  12. To contract the money supply and lower inflation, how would the FOMC conduct open market operations? • Sell government bonds

  13. Unemployment during a recession is most likely due to: • Cyclical unemployment

  14. An unemployment rate considered to have reached full employment: • ~ 5%

  15. What effect does raising the reserve requirement have on the inflation rate? • Lowers it

  16. What rate of inflation exists in Syria? Galloping What rate of inflation exists in the US? Creeping What rate of inflation exists in Zimbabwe? Hyper inflation

  17. How can the Fed use the discount rate to stimulate GDP growth? • Lower it

  18. When was the Federal Reserve system created? • 1913

  19. How many federal reserve districts does America have? • 12

  20. How many people sit on the Fed’s Board of Governors? • 7

  21. What Fed entity sets monetary policy? • Federal Open Market Committee • FOMC

  22. Who is the current Fed Chairman? • Ben Bernanke

  23. What is our current unemployment rate? • 9.9%

  24. Which of the following is counted in the unemployment rate? • Fred who works part time but needs fulltime work • Paul who does not work, but lives off his dad’s wealth • Bob who lost his Job yesterday and has already begun interviewing with Target • Bob

  25. Unemployment due to teens looking for their first job: • Frictional unemployment

  26. Unemployment due to a lawyer deciding to become a truck driver: • Frictional unemployment

  27. Employment in what type of industries are most affected by recessions? • Those selling big ticket items • ie: boats, cars etc.

  28. What is the point in the business cycle just before recovery? • Trough

  29. What’s another word for the recovery phase of the business cycle? • Expansionary phase

  30. What often happens to workers laid off during the recessionary phase when the economy begins to recover? • Rehired

  31. What type of unemployment accounts for layoffs in the banking industry when ATM machines increasingly became the norm? • Technological unemployment

  32. A hurricane wipes out 2,000 acres of orange grove land in Florida. Fruit harvesters hit the unemployment lines. Unemployment increases due to: • Seasonal unemployment

  33. The dollar value of the final goods and services produced within a country’s borders within a given year: • GDP

  34. What economic indicator is the measure of a nation’s output? • GDP

  35. What indicator reflects a nation’s production capacity? • GDP

  36. Which IS included in calculating GDP? • Sugar purchased by Betty Crocker • Tires purchased by Ford Motors Corp. • DVDs purchased by a vacationer from a Chinese street vender in Hong Kong • Cucumbers purchased at the Farmer’s Market • #4

  37. Which is included in GDP? • Concert tickets purchased on e-bay • Music downloaded illegally • Flowers purchased online • A home-made dress • #3

  38. What modification of nominal GDP is used to allow economists to compare one nation’s worker’s productivity to another nation’s? • Per capita GDP

  39. What economic indicator is a measurement of the nation’s income? • GNP

  40. What economic indicator applies to the following scenario? • The dollar value of production from a foreign plant making power tools in New Jersey • GDP

  41. What economic indicator applies to the following scenario? • Martha Stewart’s clothing line manufactured in sweat shops in Indonesia and shipped back to the US • GNP

  42. What type of fiscal policy does the graph below suggest? • Expansionary

  43. Inflation rates in Germany during the Great Depression: • Hyperinflation

  44. Theory of inflation where demand exceeds supply: • Demand-pull theory

  45. Cause of inflation wherein the government is at fault for the excessive demand: • Deficit spending

  46. What happens to the general price level when expansionary monetary policy injects too much money into the economy? • Increases

  47. What product price increase would most broadly influence the general price level? • Oil

  48. Who is most hurt by inflation? • Those on fixed incomes

  49. What type of policy is being exercised by President Obama to pull the U.S. out of the recession? • Expansionary fiscal policy

  50. How do Republicans generally prefer to exercise expansionary fiscal policy? • Tax cuts

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