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Flashcards in Economics & Monetary Policy Deck (130)
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1

Environment in which longer-term bonds have higher yields than short-term securities

Normal yield curve

2

Graphically depicts the yield relationship between long- and short-term bonds

Yield curve

3

A short-term economic contraction

Recession

4

The four phases of the economic cycle

Expansion, peak, trough and contraction

5

Longer term, severe economic contraction

Depression

6

A nation's annual output of all goods and services

Gross Domestic Product (GDP)

7

Measures the general rate of increase or decrease in prices paid for certain standard goods

Consumer Price Index (CPI)

8

General increase in the level of prices

Inflation

9

The three types of economic indicators

Leading, lagging and coincident

10

Type of indicator that predicts a trend in the economy

Leading

11

Leading, lagging or coincident indicator? The money supply

Leading

12

Leading, lagging or coincident indicator? Employment levels

Coincident

13

Leading, lagging or coincident indicator? Corporate profits

Lagging

14

Leading, lagging or coincident indicator? Industrial production

Coincident

15

Leading, lagging or coincident indicator? Average duration of unemployment

Lagging

16

Leading, lagging or coincident indicator? New orders for consumer goods

Leading

17

Leading, lagging or coincident indicator? Stock prices

Leading

18

Leading, lagging or coincident indicator? Personal income

Coincident

19

Leading, lagging or coincident indicator? GDP

Lagging

20

Leading, lagging or coincident indicator? Manufacturing and trade sales

Coincident

21

Leading, lagging or coincident indicator? Ratio of inventories to sales

Lagging

22

Economist who theorized that aggregate demand controls employment and prices

John Maynard Keynes

23

The originator of monetarist theory

Milton Friedman

24

Three tools used by monetarist theory to regulate the economy

Reserve requirement, discount rate, federal open market operations

25

Two critical fiscal policy tools used to impact economic performance

Level of taxation and government spending

26

Economic theory that promotes strong government involvement in economic policy

Keynesian economics

27

Acts as agent of the US Treasury as the nation's central bank

Federal Reserve Board

28

Regulates the U.S. money supply

Federal Reserve Board

29

Conducts the U.S. government's open-market operations

Federal Open Market Committee (FOMC)

30

Impact on the money supply of FOMC purchase of securities

Increases