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44 Cards in this Set
- Front
- Back
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what is equation for GDP?
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C+I+G+Xn
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how many fed reserve banks r there?
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12
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each bank has a board of how many directors?
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9
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what was the 3rd quarter rise in real GDP?
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2.2%
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who sets agenda for board of govs?
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Chairman
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who sets discount rate
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board of govs
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what is a "camel"
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rating standard from 1-5 (5 is worst)
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how many times a year does the FOMC meet?
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8 times
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tariff?
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tax on commodity that can enter a country; absolute imit
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customs union
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2 or more countries that abolish trade restrictions among themselves and levy a common tariff against outsiders (most successful= European union of 25 countries)
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free trade area?
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2 or more countries abolishing all trade restrictions among themselves, but not setting a common tariff against outsiders. most famous= North american free trade area
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conduct?
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how countries int'l and domestic differ; not in reason/benefit from trade
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how many countries in europe adopted currency for euro?
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12
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Milton Friedman?
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nobel prize winner for "capitalism and freedom"; when dealing in the mktplace, every person has freedom of choice to accept or reject what is offered or to select a preferred item or even brand out of a variety of alternatives.
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unemployment?
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proportion of work force tha tis involutarily unemployed, varies inversely w/ real physical output; higher level of output= lower unemployment
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inflation?
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process of rising price levels; t is computated as a weighted av of yeraly change in prices of individual products, where the weigh of each product corresponds to its relative importance in the consumer basket
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macroeconomics?
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concerned with AGGREGATE performance of the economy; highlights the problems of unemployment, inflation, and long-run growth.
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GDP
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most widely used measure of national output; money value of all FINAL goods and services produced each year.
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real GDP
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GDP adjusted for inflation
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Recession
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decline in real GDP for 2 or more successive quarters
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Stagflation
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simultaneous existence of unemployment and inflation
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monetary policy
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conducted by central bank, is an effective instrument in stabilizing and guiding the course of the economy; it is a demand management tool. its long-run objective is to maintain a growth rate in teh money stock comparable to that of real output
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3 types of quantitative measure the Fed can employ in times of inflationary boom=
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increase legal reserve ratio of banks, increase the discount rate, sell gov bonds on the open market
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in times of recession, the Fed may:
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lower reserve requirements, reduce discoun rate, buy gov bonds on the open market to infuse money into the economy
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eq. of exchange
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MV=PQ
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prof Friedman and monetarists believe that:
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private economy is inherently stable and attribute most if not all economic fluctuations to the destabilizing effects of misguided large and rapid changes in the money stock
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Keynesians believe that:
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private economy requires stabilization policy that while money matters, other things matter as well; and tat a judicious mix of discretionary fiscal and monetary policy is needed to stabilize the economy
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when does demand inflation occur?
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when aggregate demand is increased along the upward portion of the aggregate-supply curve
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Stagflation
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simultaneous existence of unemployment and inflation
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monetary policy
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conducted by central bank, is an effective instrument in stabilizing and guiding the course of the economy; it is a demand management tool. its long-run objective is to maintain a growth rate in teh money stock comparable to that of real output
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3 types of quantitative measure the Fed can employ in times of inflationary boom=
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increase legal reserve ratio of banks, increase the discount rate, sell gov bonds on the open market
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in times of recession, the Fed may:
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lower reserve requirements, reduce discoun rate, buy gov bonds on the open market to infuse money into the economy
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eq. of exchange
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MV=PQ
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prof Friedman and monetarists believe that:
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private economy is inherently stable and attribute most if not all economic fluctuations to the destabilizing effects of misguided large and rapid changes in the money stock
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Keynesians believe that:
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private economy requires stabilization policy that while money matters, other things matter as well; and tat a judicious mix of discretionary fiscal and monetary policy is needed to stabilize the economy
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when does demand inflation occur?
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when aggregate demand is increased along the upward portion of the aggregate-supply curve
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Stagflation
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simultaneous existence of unemployment and inflation
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|
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monetary policy
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conducted by central bank, is an effective instrument in stabilizing and guiding the course of the economy; it is a demand management tool. its long-run objective is to maintain a growth rate in teh money stock comparable to that of real output
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3 types of quantitative measure the Fed can employ in times of inflationary boom=
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increase legal reserve ratio of banks, increase the discount rate, sell gov bonds on the open market
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in times of recession, the Fed may:
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lower reserve requirements, reduce discoun rate, buy gov bonds on the open market to infuse money into the economy
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eq. of exchange
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MV=PQ
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prof Friedman and monetarists believe that:
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private economy is inherently stable and attribute most if not all economic fluctuations to the destabilizing effects of misguided large and rapid changes in the money stock
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Keynesians believe that:
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private economy requires stabilization policy that while money matters, other things matter as well; and tat a judicious mix of discretionary fiscal and monetary policy is needed to stabilize the economy
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when does demand inflation occur?
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when aggregate demand is increased along the upward portion of the aggregate-supply curve
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