Business Cycle and Globalization
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Created by:
love2flip961 on December 18, 2011
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20 terms
Terms | Definitions |
|---|---|
 globalization | The trend toward increased cultural and economic connectedness between people, businesses, and organizations throughout the world |
| monetary policy | The management of the money supply and interest rates; determines money supply |
| fiscal policy | congress use of taxes to maintain economic stability (keep us out of recession and depression |
| savings bond | issued by the federal government as a way of borrowing money; low-denomination bond issued by the United States government |
| tariff | a government tax on imports or exports |
| federal reserve | The central bank of the U.S. controls the the supply of money and attempts to control interest rates |
| discount rate | interest rate that the Federal Reserve System charges on loans to the nation's financial institutions |
| open market operations | the purchase and sale of U.S. government bonds by the Federal Reserve |
| reserve requirement | the amount of money that member banks must keep in the main Federal Reserve Banks |
| trade deficit | importing more than you export |
| trade surplus | exporting more than you import |
| protectionism | Economic policy of shielding an economy from imports |
| inflation | prices going up |
| comparative advantage | the ability to produce a good at a lower opportunity cost than another producer |
| deflation | prices going down |
| loose money policy | A policy where credit is abundant and inexpensive to borrow |
| exchange rate | the value of a currency in one country compared with the value in another |
| gross domestic product (GDP) | the sum of all the products that are bought and sold in the US per year |
| consumer price index (CPI) | measure of overall costs of goods and services; annual |
| tight money policy | monetary policy that reduces money supply |
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