Economics Final Exam Part 2
An investment report to potential investors
prospectus
What is a Revolver?
Americans who do not pay their monthly balance in full
What does Universal default do?
Allows creditors to change the agreed upon interest rate between them and their customer based upon violations the customer has made with other credit accounts.
What are deadbeats?
Americans who pay their monthly balance in full
What are Usury laws?
legal limits on interest rate percentage creditors can charge
The credit card buisness first took off with the elimination of _______ in _____________
usury laws and South Dakota
FICO scores range from _______ to _________. The average score is a ________.
300, 850, 720
GDP measure in current prices
Nominal GDP
GDP expressed in unchanging prices, divided by total population
Real GDP per capita
a steady long term increase in real GDP
Economic growth
GDP expressed in constant or unchanging prices
Real GDP
The dollar value of all final goods and services produced within a country's borders in a given year.
Gross domestic Product
A recession that is especially long and severe is a __________
depression
a decline in GDP combined with a rise in price levels
Staglflation
an increase in efficiency gained by producing more output witout using more inputs
Technological progress
illegal economic activies and unreported legal economic activities
underground economy
the process of increasing the amount of capital per worker
capital deepening
The pruchase of a new home theater system is an example of ________ in the GDP calculation
consumer expenditures
follows a peak in the typical business cycle
Contraction
Agricultural workers are particularly affected by _______________
seasonal unemployment
reflects workers' freedom of choice in the labor market
Frictional unemployment
the type of unemployment that is most harmful to an economy
Cyclical unemployment
occurs as a result of changes in technology or as a result of the exhaustion of a key resource.
Structural unemployment
the percentage of people in the civilian labor force who are unemployed
Unemployment rate
have jobs beneath their skill level or want full-time work but can only find part-time jobs
underemployed workers
someone who wants a job but has given up looking
discouraged worker
a sustained drop in the price level
Deflation
When the economy is working properly, the undermployment rate is __________________
4 to 6 percent
According to the demand-pull theory, ___________________________
demand for goods and services exceeds existing supply
In a ________________ prices rise, workers often bargain for higher wages and therefore, producers often raise prices.
wage-price spiral
According to the cost-push theory, ______________________________
producers raise prives to meet increased costs
the federal government's use of taxing and spending to keep the economy stable.
Fiscal policy
involves cutting taxes and/or increasing government spending
expansionary policies
involves raising taxes and/or decreasing government spending
contractionary policies
a document authorizing specific spending
appropriations bill
a written document indicating the amount of money the government expevts to receive for a certain year and authorizing the amount of money the government can spend that year.
federal budget
the idea that the government can and should regulate the economy
Keynesian economics
the idea that taxation is a major aspect of the economy
Supply-side economics
the idea that markets regulate themselves
Classical economics
a parliamentary procedure that allows passage of a budget bill by a simple majority in the senate
Reconciliation
extended prescription drug coverage to seniors under the guidelines of Medicare
Medicare Part-D
the government program that pays the cost of medical coverage for those over the age of 65.
Medicare
one of the big three entitlement programs in the federal budget. American wo reach age 62 can claim early retirment and begin collecting it.
Social Security
increases the money supply
Easy monetary policy
the seven member group that oversees the Federal Reserve System
The Board of Governors
the actions the Federal Reserve takes to influence the level of real GDP and the rate of inflation
Monetary policy
the interst rate banks charge each other for loans is the _______________
federal funds rate
the rate of interest banks charge on short-term loans to their best customers.
prime rate
the rate the Federal Reserve charges for emergency laons to banks
discount rate