Econ 2Nd Midterm

Front 1

expansionary fiscal policy

Back 1

-an increase in government purchases of goods and services
-cut in taxes
-an increase in government transfers

Front 2

contractionary fiscal policy

Back 2

-reduction in government purchases of goods and services
-an increase in taxes
-reduction in government transfers

Front 3

Government Directly Controls

Back 3

G but influences C and I through T and R

Front 4

Budget Balance

Back 4

=T-G-R

Front 5

Time Lags

Back 5

a lag in reaction of economy to the action of the government. It increases in spending to fight a recessionary gap, may occur too late

Front 6

Automatic Stabilizer

Back 6

govt spending and taxation rules that cause fiscal policy to be automatically expansionary when the economy contracts and automatically contracts when the economy expands without requiring any deliberate actions by policy makers

Front 7

Bank Run

Back 7

phenomenon in which many of a bank's depositors try to withdraw their funds due to fears of a bank failure

Front 8

Commodity Money

Back 8

a medium of exchange that is a good, normally gold or silver, that has intrinsic value in other uses

Front 9

Fed Controls

Back 9

-discount rate
-monetary base
-reserve ratio

Front 10

Roles of Money

Back 10

Medium of exchange
Store of Value
Unit of Account

Front 11

Liabilities of Banks

Back 11

Liabilities of banks are deposits banks hold