Download Economics: Module 4 Note Taking Guide

Economics: Module 4 Note Taking Guide
1. What is the Gross National Product (GDP)? _____________________________________________________________
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2. Write about how each of these five major factors affects the GDP:
Population__________________________________________________________________________________
Entrepreneurship_____________________________________________________________________________
Trade_______________________________________________________________________________________
War________________________________________________________________________________________
Natural Resources____________________________________________________________________________
3. What are the four phases of the business cycle? Describe each:
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4. Government regulation attempts to __________________, ____________________, & ________________________.
5. One way the government can regulate is by setting a price level for specific goods and services. Another specific
example of government regulation is __________________ for agriculture which is paid to farmers to supplement their
income.
6. If the price is too high above the equilibrium, there will be a ______________, and if it is too low there will be a
________________.
7. List several examples of natural monopolies regulated by the government: ___________________________________
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8. Below is a chart of the Federal Reserve hierarchy. Fill in the descriptions for each in detail:
Hierarchy
1st
Section of the Federal Reserve
Board of Governors
2nd
3rd
Federal Open Market
Committee (FOMC)
Federal Reserve Banks
4th
Member Banks
5th
Other Depository Institutions
Description
Economics: Module 4 Note Taking Guide
9. The Monetary Policy includes the Expansionary monetary policy and Contractionary monetary policy. Describe the
actions of each: _____________________________________________________________________________________
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10. The Federal Reserve has three tools of monetary policy to (theoretically) affect the money policy:
Discount rate _______________________________________________________________________________
A decreasing discount rate = member banks ________ more $ = banks loan ________ $ to people.
An increasing discount rate = member banks ________ less $ = ________ loans available to people.
Reserve Requirement _________________________________________________________________________
A decreasing reserve req. = banks keep ______ $ in vault = banks loan _______ $ to people.
An increasing reserve req. = banks keep ______ $ in vault = ________ loans available to people.
Open Market Operations ______________________________________________________________________
Buy bonds = FED ______ banks $ for bonds = banks loan _______ $ to people.
Sell bonds = FED ______ $ from banks = _______ loans available to people by the bank.
11. The tools of fiscal policy are ____________ and ________________.
12. Our government creates a _______________ by spending more than the total tax revenue and _________ is the
total amount a government owes.
13. Government can create a _________________ by collecting more in taxes than is spent on programs.
14. The government borrows money by _________________________________________________________________
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