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WorksheetsAdvanced Economics
Total questions: 36
Worksheet time: 20mins
_______ is an increase in prices over time.
Expansion
Interest Rate
If people & businesses spend a LOT of money and the money supply increases too much, what tends to happen?
High inflation rates
High unemployment rates
GDP crashes
Currently, what's our inflation rate? [Think back to that CPI/Inflation worksheet & website]
2.9%
4.8%
8.5%
U.S. currency is no longer backed by gold or silver. What kind of currency does that mean we have now?
cryptocurrency
legal tender
fiat
What are the four phases of the business cycle?
expansion, peak, contraction, trough
expansion, peak, recession, depression
land, labor, capital, entreprenuership
In the business cycle, what happens during the contraction phase? [Hint: contractions are painful]
GDP rises, unemployment rates decrease, and businesses spend more money.
Economic activity declines, leading to reduced spending and increased unemployment.
What happens during the expansion phase of the business cycle?
Economic activity increases, leading to rising GDP
A contraction lasting at least 6 months is known as what?
inflation
depression
recession
What tends to start a contraction or recession?
Governments spend less
Consumers spend less
Exports increase
What does it mean if Gross Domestic Product (GDP) is falling?
Less money is being spent on goods & services
Inflation (prices going up)
Consumer confidence is high
When consumers and businesses spend less, what tends to follow?
Governments spend less
Inflation
Unemployment rises
This economic indicator measures the value of all new goods & services produced within the country within a certain time frame (ex: 1 year).
GDP Per Capita
What is a piece of significant economic data that economists use to evaluate the overall health of the economy?
statistics
economic indicator
heat maps
Who handles monetary policy?
Congress (the government)
The Federal Reserve (our central bank)
Economic indicator that surveys the public to see if they are optimistic or pessimistic about the economy
GDP
Consumer Price Index (CPI)
Consumer Confidence
Consumer Price Index (CPI) measures what?
Total sales of goods and services
If prices are rising or falling
Interest Rates
What is the correct GDP formula?
C - I - G - X
C + B + G + I
C + I + G + Xn
C + I + G - Xn
What does the unemployment rate measure?
% of people working
% of people not working
% of labor force out of work and looking for work
Rising interest rates do what?
Encourage consumer spending
Automatically kicks off a recession
Slows economic growth
The phases of expansion and contraction in an economy over time?
__________ unemployment is caused by a downturn in the economy (contraction or recession).
structural
cyclical
seasonal
frictional
Who handles fiscal policy?
Congress (the government)
The Federal Reserve (central bank)
GDP = C + I + G + Xn What does Xn stand for?
Consumer spending
Business spending
Net exports
(exports - imports)
If businesses and consumers are spending less money, who can spend more money to get us out of a recession?
The government
The Federal Reserve Bank
What does GDP Per Capita measure?
The average income of a population
Total sales in a nation
A nation's wealth & standard of living
Who is the current chairperson of the Federal Reserve Board (our central bank)?
Adam Smith
How many regional banks are in the Federal Reserve?
1
Who is included in the labor force?
15-year-old working part-time
17-year-old working part-time
Someone in the Army
Stay-at-home parent who isn't looking for a job
Increasing the money supply (more money in circulation) is the same thing as...
stimulating (heating up) the economy
slowing down (cooling down) the economy
What is the U.S.A.'s goal for the unemployment rate?
0%
2%
4%
15%
What is the U.S.A.'s goal for GDP growth each year?
0%
2%
5%
15%
When does a recession happen?
when GDP goes down for 6 months or more
when inflation rates are at their highest
when unemployment rates drop significantly
The % of deposits that banks must keep in their vaults (and cannot lend out).
____ will adjust interest rates, change reserve requirements, and buy/sell Treasury Bonds to help keep our economy on track.
Congress
The Federal Reserve Bank
If the unemployment rate is rising and GDP is falling, the monetary policy action that the Federal Reserve Board should MOST likely follow is
decrease taxes
decrease interest rates
increase interest rates
