ECON100 Recessionary Gap Using Government Spending Questions Response
ECON100 Recessionary Gap Using Government Spending Questions Response
questions are on files.
.
Money & Banking
A)
Define
(in your own words, please do not use the book, or other online resources)
and give a strong, unique, example for the following terms. Answers will be checked for originality.
Store of Value:
________
Automatic Stabilizer :
___________
FOMC:
_____________________________________________________
Discount Rate:
_____________________________________________________
List the names and dates of the last four chairmen of the FED, starting with the current one:
_____________________________________________________
Transaction Costs:
_____________________________________________________
Federal Funds Rate:_____________________________________________________
Section 1
: Money Supply
Look at the following H6 report from the Federal Reserve:
http://www.federalreserve.gov/releases/h6/current/…
For the most recent available month and one year before that, fill out the following table (use
seasonally adjusted figures):
Category
Most
Recent
One Year
Before
Percentage
Change
Currency
Demand Deposits
Traveler’s Checks
Checkable Deposits at Commercial Banks
Checkable Deposits at Thrift Institutions
Savings Deposits at Commercial Banks
Savings Deposits at Thrift Institutions
Small
–
Denomination Time Deposits,
total
Retail Money Funds
What is
M1
in the most recent year?
_________________
One year before?
_________________
Percentage change?
_________________
What is
M2
in the most recent year?
_________________
One year before?
_________________
Percentage change?
_________________
What category most
caused
the
change
in M2?
_________________
Section
2
:
Fiscal Policy
Graph the following situation for the economy:
1)
Current
Real
GDP
=
$
17.5T
Potenti
al
Real GDP = $20T
MPC = .
9
How much would be necessary to
close the recessionary / inflationary
gap
(circle
one)
using government spending
?
_____________
o
r taxes________
__
______
?
2)
Current
Real
GDP
=
$
21
.5T
Potenti
al
Real GDP = $20T
MP
S
= .
2
How much would be necessary to
close the recessionary / inflationary
gap
(circle
one)
using government spending
?
_____________
or taxes________
__
______
?
Section
3
:
Federal Budget &
National Debt
Take the Federal
Budget Challenge and try your hand at fi
xing the
problems
with the economy.
https://www.federalbudgetchallenge.org
When taking this challen
ge,
use your
economic reason
ing skills to
decide
what to cut and raise
for the different spending/
taxing categories.
Copy & paste your summary below:
