Economics and Business Information Flashcards
1
Q
Business Cycle
A
- expansion
- peak
- contraction
- trough
2
Q
Cyclical Industries
A
- do well during times of economic expansion
- automobile, steel industry
3
Q
Defensive industries
A
- no matter what happens in the economy
- food, clothing, utilities
4
Q
Counter Cyclical Industries
A
- does well in times of contraction, poorly in good times
- gold/precious metals
5
Q
Fiscal Policy
A
- government control
- spending and taxes
6
Q
Monetary Policy
A
- controlled by the FRB
- control inflation is primary role, tied to money supply
7
Q
How does Fed Reserve Board control money supply
A
- buy/sell government
- buying t bills from banks put more money in the banks hands increasing money in economy
- selling t bills to banks takes money from economy
- interest rates make money more available
8
Q
BEST
A
- buy = expand
- sell = tighten
9
Q
Interest Rates
A
- increase = take money out of economy
- decrease = put money into economy
10
Q
Inflation
A
- too much money chasing too few goods
- occurs when economy in strong
- FRB takes money out to control inflation
11
Q
Supply of Money effects value of currency
A
- put more money out there. Value of currency decreases
- take money out value increases
12
Q
Exports
A
- decreased currency increases exports improves trade deficit
- increased currency decreases exports worsen trade deficit
13
Q
Yield Curve
A
- normal = LT bonds have higher rates than ST
- inverted = ST bonds have higher rates than LT, precursor for recession
14
Q
Economic Indicators
A
- leading (where we will be 6-9 months down road)
- coincidence
- lagging
used to show where we are in business cycle
15
Q
Leading Indicators
A
- stock market
- unemployment claims
- Housing
