STUDY GUIDE

MACROECONOMICS UNIT 3

1.  Know the following types of unemployment and be able to identify each through examples or scenarios.

·  Cyclical

·  Frictional

·  Structural

·  Seasonal

2.  Know the following types of tax and be able to identify through examples or scenarios.

·  Progressive

·  Proportional

·  Regressive

  1. Income tax
  2. Social Security Tax
  3. Sales Tax
  4. Flat Tax

3.  Define and identify the stages of the business cycle as well as recession and depression.

4.  What conditions are associated with a recession?

5.  What conditions are associated with a period of expansion?

6.  Know how GDP is calculated and what is counted in calculating GDP.

7.  Identify the tools of monetary policy.

8.  What would the government do if the economy was in a recession?

9.  Define GDP.

10.  What would the FED do if the economy was in a recession and wanted to increase the money supply?

11.  The U.S. economy is going through a severe recession. What policies could the government enact to get the economy moving again?

12.  What fiscal policies are used to reduce inflation?

13.  What is the discount rate and how does lowering the discount rate impact the economy?

14.  What are the two tools of fiscal policy?

15.  Define macroeconomics and describe the types of issues macroeconomics encounter.

16.  What is Reserve Requirement?

17.  Other banks borrow money from the FED. The FED charges interest on this money. What is this known as?

18.  The ______is in charge of fiscal policy and the ______is in charge of monetary policy.

19.  Why would the FED want to shrink the money supply?

20.  The Bureau of Printing and Engraving ______while the FED ______.

21.  In the formula for GDP, what does the “X” and the “M” stand for?

22.  In the formula for GDP, what does the “C” and “G” stand for?

23.  What would the FED do if the economy was in a recession?

24.  Draw the business cycle and label the following: Expansion, Recession, Trough, Peak.

25.  Define monetary policy.

26.  Define fiscal policy.

27.  What is the formula for GDP?

28.  Who is the chairperson of the FED?

29.  What is the difference between debt and deficit?

30.  What are the causes of inflation?

31.  What is aggregate supply?

32.  What is aggregate demand?

33.  What is money?