Unit 2 Study Guide

Question 1

Structual

Answer 1

cant get the job or lose the job bc u lack the skill for that job

Question 2

Frictional

Answer 2

actively looking & between jobs

Question 3

cyclical

Answer 3

related to swing in business

Question 4

What counts in GDP

Answer 4

consumption, investment, government & net exports

Question 5

types of employment

Answer 5

-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

Question 6

Business cycles

Answer 6

-Expansion: Wages increase ⬆️📈
-Peak: GDP reaches top (max)
-Contraction: Jobs decline, ⬇️📉
-Through: Economy bottoms out 👎❌

Question 7

Inflation

Answer 7

Retired people suffer, college students on fixed rate benefit.

Question 8

Impact protectionist measures

Answer 8

Restrict imports, Supply ⬇️, Prices 💵⬆️

Question 9

Fiscal Policies

Answer 9

Uses expansionary policy increase growth

Question 10

Opening markets free trade

Answer 10

Foriegn investments in US goods

Question 11

budget deficit

Answer 11

exceeding the money limit

Question 12

global interdependence

Answer 12

countries working together, doing favors, international trade

Question 13

how does budget deficit happen?

Answer 13

when president spends more 💵 then limit

Question 14

impact of automation

Answer 14

Decrease employment, Increase efficiency

Question 15

impact floating exchange rates

Answer 15

fail to deliver low inflation

Question 16

FEDS primary goals

Answer 16

price stability & max employment

Question 17

Argument against raising tarrifs

Answer 17

Prices for consumers are raised & create inefficient sectors from competition

Question 18

why was FED created?

Answer 18

To help make stable monetary system

Question 19

Regressive taxes

Answer 19

Tax that takes bigger % of income from low income ppl

Question 20

Ways FEDS can reduce inflation

Answer 20

Interest rate raises ⬆️, borrowing money to demand for goods & services

Question 21

Tools monetary policy

Answer 21

Reserve requirements are anount of 💵 a bank holds& discount rate, open market operations