CE Vocab 12: Business and Government

Limiting or stopping trade with a nation to encourage a change in behavior

• business cycle

• monetary policy

• fiscal policy

• sanctions

Repeated series of ups of growth and downs of recession that reflects the general state of the economy

• business cycle

• monetary policy

• fiscal policy

• sanctions

Regulation of the money supply by the Federal Reserve System

• business cycle

• monetary policy

• fiscal policy

• sanctions

Government decisions about the amount of money it spends and the amount of money it collects in taxes

• business cycle

• monetary policy

• fiscal policy

• sanctions

Price levels decrease because money has increased in value, but this could lead to less spending and recession.

• inflation

• deflation

Money loses value causing a general rise in prices, but small amounts of this encourages spending that is good for the economy

• inflation

• deflation

Final dollar value of all the goods and services produced within a country in a year. (Best indicator of Business Cycle)

• Gross Domestic Product (GDP)

• Consumer Price Index (CPI)

• Federal Reserve System (FED)

Traces the changes in price over time. (Identifies inflation)

• Gross Domestic Product (GDP)

• Consumer Price Index (CPI)

• Federal Reserve System (FED)

Regulates the value of money (monetary policy) by providing important information to US banks and regulates their activities

• Gross Domestic Product (GDP)

• Consumer Price Index (CPI)

• Federal Reserve System (FED)

Government incentive ($) to encourage or discourage economic activity

• deficit

• tariffs

• subsidies

• standard of living