Economic Policy Review

Which of these people would be considered unemployed by the federal government.

• A stay at home mom who is not looking for a job.

• A retired person.

• A woman who was fired from her job as an appointment setter.

• A man who was fed up with his job and quit.

The GDP is up, the CPI is up, and unemployment is down.... Where are we in the business cycle?

• Expansion

• Contraction

We are currently experiencing an upswing in the economy, the GDP is up and unemployment is down. What goal does the federal government have for the economy?

• Try to continue to expand the economy by lowering taxes and raising spending.

• Begin to contract the economy by cutting government spending and raising taxes

• The government likes being in expansion so they will do nothing.

• There is nothing the government can do to affect the business cycle.

What is the function of the Federal Reserve?

• Loan money to the federal government

• Raising and lowering of taxes.

• Print Money

• Control the money supply.

The unemployment numbers are in for the month and unemployment is at a 5 year low. What would the federal government look to do with its fiscal tools to influence the economy?

• Raise spending and lower taxes

• Lower spending and raise taxes.

• This is normal, the government would do nothing.

In which scenario would the fed want to increase the money supply?

• The United States just posted its highest year for GDP in the past 10 years with the GDP rising by 12%.

• Unemployment is skyrocketing and people are spending less and less money

• The CPI is up by 5% this year compared to the same time last year.

• Consumer spending roughly is the same as it was last year, with a minimal .5% increase.

What are Socio-Economic goals?

• Goals set by the president to accomplish by the end of his term.

• Goals the federal reserve makes for the country.

• Goals that big businesses must meet in order to show that our economy is successful.

• These are goals that guide a country in creating policy to help its citizens have economic success.

The government just increased taxes and lowered spending in response to the US economic indicators. Where are we at in the business cycle?

• Expansion

• Contraction

What is Consumer Price Index (CPI)?

• How much items cost at the store.

• A fiscal tool that the government can use.

• How much the government is spending on programs.

• The amount of money that people are spending on a "basket" of goods and services.

What is the Gross Domestic Product?

• The amount of money that a country prints each year.

• The amount of products created by businesses and exported to other countries.

• The total value of all final goods and services produced within a country's borders in a given time period

• The total amount of money that a country's government must make each year in order to function properly.