Unit 2 Study Guide Flashcards
Structual
cant get the job or lose the job bc u lack the skill for that job
Frictional
actively looking & between jobs
cyclical
related to swing in business
What counts in GDP
consumption, investment, government & net exports
types of employment
-seasonal having a job only for winter
- structural: people cant get job bc lack of skills
- Frictional: Between jobs& actively seeking for another
-Cyclical: Related to Swigs in business
Business cycles
-Expansion: Wages increase ⬆️📈
-Peak: GDP reaches top (max)
-Contraction: Jobs decline, ⬇️📉
-Through: Economy bottoms out 👎❌
Inflation
Retired people suffer, college students on fixed rate benefit.
Impact protectionist measures
Restrict imports, Supply ⬇️, Prices 💵⬆️
Fiscal Policies
Uses expansionary policy increase growth
Opening markets free trade
Foriegn investments in US goods
budget deficit
exceeding the money limit
global interdependence
countries working together, doing favors, international trade
how does budget deficit happen?
when president spends more 💵 then limit
impact of automation
Decrease employment, Increase efficiency
impact floating exchange rates
fail to deliver low inflation
FEDS primary goals
price stability & max employment
Argument against raising tarrifs
Prices for consumers are raised & create inefficient sectors from competition
why was FED created?
To help make stable monetary system
Regressive taxes
Tax that takes bigger % of income from low income ppl
Ways FEDS can reduce inflation
Interest rate raises ⬆️, borrowing money to demand for goods & services
Tools monetary policy
Reserve requirements are anount of 💵 a bank holds& discount rate, open market operations
