APK: Activation of Prior Knowledge Write at least 2-3 sentences describing a time when… you relied and/or hoped for someone to help you fix a bad financial situation. _____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ Question of the Day How can the Fed help the economy through difficult times in the business cycle?

Lesson Questions Answer the two questions relating to the Business Cycle Chart on page 638. Explain what GDP Gross Domestic Product means. How can the value of the real GDP let the government know how the economy is doing? [See page 638-639] Explain what CPI Consumer Price Index means. How can the CPI let the government know how the economy is doing? [See page 642] Explain what the Fed Federal Reserve Bank does. How can the Fed control and help the economy with the FOMC Federal Open Market Committee, Monetary policy, the discount rate and open market operations? [See pages 661-665]