Chapter 15 and 16 Economics 12

First part of Jeopardy deals w/ Chapter 15

British economist in the 1930s developed new ideas to Economics. He believed boosting or increasing demand when the economy is down is the government’s role.

John Maynard Keynes

A school of thought that uses demand-side theory as the basis for encouraging government action to help the economy: A) Supply-side Economics B) Reaganomics C) Keynesian Economics D) A and B

C) Keynesian Economics

A situation in which budget expenditures exceed revenues:

Budget Deficit

The total amount of money the federal government owes to bondholders:

National Debt

A school of thought based on the idea that the supply of goods drives the economy--- Known as “Reaganomics”:

Supply-Side Economics

A school of thought based on the idea that free markets regulate themselves: A) Demand-side Economics B) Supply-side Economics C) Classical Economics D) Keynesian Economics

C) Classical Economics

The loss of funds for private investment caused by government borrowing :

Crowding-out Effect

A situation in which budget revenues exceed expenditures:

Budget Surplus

A government bond with a term of from 2 to 10 years:

Treasury Note

A government bond that is issued with a term of 30 years:

Treasury Bond

In 1981 he rejected Keynesian Economics and believed in the ‘opposite’ believing the supply-side economics could drive an economy out of a recession:

President Ronald Reagan

A school of thought based on the idea that demand for goods drives the economy: A) Demand-side Economics B) Supply-side Economics C) Classical Economics D) Keynesian Economics

A) Demand-side Economics

A bill authorizes a specific amount of spending by the government:

Appropriations Bill

Any 12 month period used for budgetary purposes:

Fiscal Year

A written document estimating the federal government’s revenue and authorizing its spending for the coming year:

Federal Budget

A government bond with a maturity date of 26 weeks or less:

Treasury Bill

The use of government spending and revenue collection to influence the economy:

Fiscal Policy

The idea that every dollar change in fiscal policy creates a change greater than one dollar in the national income:

Multiplier Effect

The maximum output that an economy can sustain over a period of time without increasing inflation:

Productive Capacity

A tool or fiscal policy that increases or decreases automatically depending on changes in GDP and personal income:

Automatic Stabilizer

Second part of Jeopardy Deals w/ Chapter 16

What is the central bank of the United States which was created in 1913:

Federal Reserve System

Name the district number…(switching back and forth)

1) Boston7) Chicago 2) New York 8) St. Louis 3) Philadelphia9) Minneapolis 4) Cleveland10) Kansas City 5) Richmond11) Dallas 6) Atlanta12) San Francisco

If the Treasury Department is the government’s banker, then WHO is the government’s bank:

The FED or The Federal Reserve System

What is the method of crediting and debiting banks’ reserve accounts:

Check Clearing

When money expands in the money supply, it increases aggregate demand and promotes economic growth which is called:

Easy-Money Policy

This is usually adopted during a recession to move an economy towards recovery:

Easy-Money Policy

This is an interest rate the Federal Reserve System charges its member banks for the use of its reserves:

Discount Rate

This is a decision making group for the FED that is made up of 12 members---What is this group called: A) Board of Governors B) National Monetary Commission C) Federal Open Market Committee D) The Head of the Fed

C) Federal Open Market Committee

The highest policy making body in the FED is known as: A) Board of Governors B) National Monetary Commission C) Federal Open Market Committee D) The Head of the Fed

A) Board of Governors

This is characterized by higher interest rates and a contraction in the money supply: A) Easy-Money Policy B) Tight-Money Policy C) Reserve Requirement D) Moral Suasion

B) Tight-Money Policy

Money that must be held by banks in their own vaults or in its accounts at the district Federal Reserve bank: A) Discount Rate Requirement B) Prime Rate Requirement C) Reserve Requirement D) Moral Suasion

C) Reserve Requirement

True or False The interest rate banks charge loans to their most loyal and reliable business customers is called the Prime Rate:

True

True or False The plan to alter the money supply in order to influence the cost and availability of credit is called Easy-Money Policy:

False The plan to alter the money supply in order to influence the cost and availability of credit is called Monetary Policy

When larger commercial banks receive more deposits and have more funds to loan, this traditionally happens during periods of: A) Stability B) Recession C) Trough D) Prosperity

D) Prosperity

True or False Commercial banks such as the St. Clair state Bank is allowed to borrow money from the Federal Reserve System:

True

True or False The Federal Reserve System is not in the business of extending loans out to corporations or to individuals:

False The Federal Reserve System may give loans to both a corporations and to individuals

True or False The amount of money in circulation in the United States economy is called the money supply.

True

Now name the city in the district on the next slide…………(switching back and forth)

1) Boston7) Chicago 2) New York 8) St. Louis 3) Philadelphia9) Minneapolis 4) Cleveland10) Kansas City 5) Richmond11) Dallas 6) Atlanta12) San Francisco

True or False The Treasury Department collects taxes through the Internal Revenue Service and the U.S. Custom Services: True or False The Treasury Department collects taxes through the Internal Revenue Service and the U.S. Custom Services:

True

In 1913 when the FED was created, it broke up the system into two levels which are called: A) State and Regional B) National and District C) Regional and District D) None of the Above

B) National and District

True or False: Membership in the Federal Reserve System is optional for state-chartered banks:

True

The person/group responsible for running the FED today is: A) The Head of the FED B) The President of the United States C) The Secretary of the Treasury D) The Board of Governors

A) The Head of the FED

Last Question: Who is this guy :

Benjamin Bernake

Last Question: Who is this guy: Last Question: Who is this guy:

Alan Greenspan