Ch. 15 Review

15.1 By the late 1800s our government mostly accepted the concept of ___toward the economy.

• reform

• laissez-faire

• inclusion

• capitalism

15.1 Today America is more accurately described as having a ___and while capitalism remains the system of exchange

• mixed economy

• market economy

• traditional economy

• sharing economy

15.2 The caveat is that demand in general being high causes prices for goods and services to increase, leading to a condition known as

• inflation

• recession

15.2 If recession gets out of hand, it can thus spiral into an existential problem of economic collapse known as a

• inflation

• depression

15.2 the sole regulator of the aggregate availability of money in the economy

• foreign policy

• fiscal policy

• monetary policy

• trade policy

15.2 Who supervises a system of twelve Federal Reserve Banks deployed in major cities around the country who make money available to large banks?

• Review board

• Planning board

• Advisory board

• Federal Reserve Board

15.2 To fight a recession the Fed can stimulate the economy indirectly by lowering the discount rate (and taking other steps to encourage lending, borrowing, and thus, spending). This creates and/or stimulates demand in the economy, helping to pull the country out of recession. This is called what?

• loose money

• tight money

15.2 To fight inflation the Fed works to slow down the economy, taking an opposite approach by raising the discount rate and making it more costly or difficult to borrow as the prime rate and other interest rates increase accordingly. This works to retard demand in the economy, hopefully removing inflationary pressures. This strategy is often called what?

• loose money

• tight money

15.2 The modern approach to using government policies to proactively manage the economy by manipulating demand

• Microeconomics

• Labor economics

• Keynesian economics

• Macroeconomics

15.2 In the 1970s, America was experiencing inflation and recession at the same time. This phenomena is called what?

• depression

• inflation

• recession

• stagflation