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Chapter 14 and 15 review by wuyunqing

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									                                Economics
                         Chapter 14 and 15 Review
                      Test Friday November 20, 2009
                     Bring a pencil with you for the test

Vocabulary: Please define the following. Suggestion: create
flashcards for easy review of vocabulary.
Chapter 14:

   1. Business Cycles:

   2. Business Fluctuations

   3. peak

   4.   trough

   5. recession

   6. unemployment rate

   7. frictional unemployment

   8. structural unemployment

   9. cyclical unemployment

   10. technological unemployment

   11. Price level

   12. deflation

   13. creeping inflation

   14. galloping inflation

   15. hyperinflation

   16. Lorenz curve

   17. poverty guidelines
  18. welfare

  19. food stamps

  20. workfare


  Chapter 15:
  21. monetary policy

  22. reserve requirement

  23. excess reserves

  24. discount rate

  25. margin requirements


Answer the following questions. If it ask for an example try
and identify two or three.
  26. What are the two phases of the business cycle?

  27. What is a depression?

  28. What factors contributed to the Great Depression?

  29. What factors contribute to business cycles?

  30. What is the index of leading indicators?

  31. Give examples of the following

         a. Seasonally unemployed

         b. Technologically unemployed

         c. Cyclically unemployed

  32. Why does the unemployment rate understate employment conditions?

  33. When is full employment reached?

  34. How is the inflation rate calculated?
35. What is the wage-price spiral theory of inflation?

36. What are the consequences of inflation?

37. If all families received exactly the same income, the Lorenz curve would appear

   as a _____________________________line.

38. Why do we have income inequality?

39. When is a person considered “living in poverty?

40. How many (approximately) Americans are currently living in poverty?

41. Why has the income gap widened since 1980?

42. Who owns the FED?

43. What banks are members of the FED?

44. What are the parts of the Federal Reserve System?

45. What services does the FED provide?

46. When a bank keeps $12 of $100 deposit as legal reserves, it is using the

   _______________________________ system.

47. What are excess reserves?

48. What actions does the FED use to promote “easy money?”

49. What actions does the FED use to promote “tight money?”

50. What are the tools of monetary policy?

								
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