Core Curriculum Chapter 2 Flashcards
What are the six phases of the business cycle?
Recovery, Expansion, Peak, Contraction, Recession, Trough.
What are the three types of economic indicators?
Leading, Coincident, Lagging.
What are the three functions of money?
Medium of exchange, store of value, unit of account.
What causes inflation?
Increase in money supply, cost-push inflation, demand-pull inflation.
What is stagflation?
High inflation + high unemployment.
What does the Bank of Canada use to control inflation?
Monetary policy, interest rates, money supply regulation.
What is fiscal policy?
Government taxation, spending, and regulation to influence the economy.
What is GDP and why is it important?
Gross Domestic Product – measures economic activity and growth.
What is the difference between M0 and M2++ money supply?
M0: Cash & coins.
M2++: Includes savings, mutual funds, Canada Savings Bonds.
What happens when the Canadian dollar weakens against the USD?
Canadian exports become cheaper, imports become more expensive.
