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Business cycles

Recurring upswings and downswings in an economy's real GDP over time are called:

A recession

The phase of the business cycle in which real GDP declines is called:

the trough

The phase of the business cycle in which real GDP is at a minimum is called:


In which phase of the business cycle will the economy most likely experience rising real output and falling unemployment rates?

full-employment unemployment rate

The natural rate of unemployment is the:

percentage of the labor force that is unemployed

The unemployment rate is the:

frictionally unemployed

Kara voluntarily quit her job as an insurance agent to return to school full-time to earn an MBA degree. With degree in hand she is now searching for a position in management. Kara presently is:

structural and frictional unemployment

Which of the following constitute the unemployment occurring at the natural rate of unemployment?

cyclical unemployment

The type of unemployment associated with recessions is called:

Bureau of Labor Statistics

The government agency responsible for collection and reporting unemployment data is the:

actual GDP and potential GDP

The GDP measures the difference between;

shows the relationship between the unemployment rate and the size of the negative GDP gap

Okun's Law:

demand-pull inflation

"Too much money chasing too few goods" best describes

tie wage increases to changes in the price level

Cost-of-living adjustment clauses: (COLA)

Council of Economic Advisers

The group of three economists appointed by the President to provide fiscal policy recommendations is the :

the Federal government

Fiscal policy is carried out primarily by:

is designed to expand real GDP

Expansionary fiscal policy is so named because it

require no legislative action by Congress to be made effective

A major advantage of the built in or automatic stabilizers is they

subtracting government tax revenues from government spending in a particular year

The federal budget deficit is found by:

budget deficit

The amount by which government expenditures exceed revenues during a particular year is the

all of the above

Money functions as:

store of value

If you place apart of your summer earnings in a savings account, you are using money primarily as

a means of payment

When economists say that money serves as a medium of exchange, they mean that it is

a monetary unit for measuring and comparing the relative value of goods

When economists say that money serves as a unit of account, they mean that it is:

Federal Reserves notes

The paper money used in the United States is:

coins, paper currency, and checkable deposits

In the United States, the money supply (M1) is comprised of

included in M1

Checkable deposits are:

Federal Reserve Banks

Paper money (currency) in the United States is issued by the:

Federal Reserve Note

a $20 bill is a :

Board of Governors of the Federal Reserve

the basic policy making body in the U.S. banking system is the


The federal reserve system was created in

Federal Reserve System

In the US economy the money supply is controlled by the

Federal Open Market Committee

As it relates to Federal Reserve activities, the acronym FOMC describes the


The group that sets the Federal Reserve Systems policy on buying and selling government securities

There are seven members of the Federal Reserve Board of Governors

Which one of the following is true about the US Federal Reserve system

There are 12 regional Federal Reserve Banks

Which one of the following is true about the US Federal Reserve system


The board of governors of the federal reserve has ____ members

serve 14 year terms

The members of the Federal reserve board

fractional reserves

Most modern banking systems are based on

deposits at the Federal Reserve bank and vault cash

The reserves of a commercial bank consist of

provide a means by which the monetary authorities can influence the lending ability of commercial banks

The primary purpose of the legal reserve requirement is to

excess reserves

The amount that a commercial bank can lend is determined by

its checkable deposits multiplied by the reserve requirement

the amount of reserves that a commercial bank is required to hold is equal to

banks borrow reserves from one another on an overnight basis

The Federal funds market is the market in which

medium of exchange

The transactions demand for money is most closely related to money functioning as a

store of value

The asset demand for money is most closely related to money functioning as a

open market operations

Which of the following is a tool of monetary policy

Board of Governors of the Federal Reserve System

In the United States monetary policy is the responsibility of the

the discount rate, the reserve ratio, and open market operations

The three main tools of monetary policy are

borrowing from a Federal Reserve Bank

A commercial bank can add to its actual reserves by

Federal Reserve Banks lend to commercial banks

The discount rate is the rate of interest at which

Federal funds rate

The interest rate that banks charge one another on overnight loans is called the

raise interest rates and restrict the availability of bank credit

The purpose of a restrictive monetary policy is to

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