Unit 2 Review

Here's how to play JEOPARDY! The class will be split into two teams, the RED team and the GREEN team. When a question is displayed, the RED team will use the ABCD keys on their clickers to answer. The GREEN team will use the EFGH keys to answer. The team with the HIGHEST PERCENTAGE of correct responses will earn the points for that question, AND the right to pick the next category! Let's do a practice question to make sure everybody understands how to play. Go on to the Practice Question

1 Insert Question Here A B C D E F G H Sample Question Music Go on to the Game Board A Michigan Wolverines E B Michigan State Spartans F C Ohio State Buckeyes G D Notre Dame Fighting Irish H Michigan Wolverines Who is the greatest college football team?

Chapter 17 Unemployment Chapter 15Chapter 13Models $100 $200 $300 $400 $500

Back to Game Board Red Team Green Team Score Board

1 Insert Question Here A B C D E F G H 100 pts MusicScoreBack A Rise from Q2 to Q0 E B Fall from Q0 to Q2 F C Rise from Q0 to Q1 G D Fall from Q1 to Q0 H Milton Friedman Based on the graph, the increase in oil prices caused output to

2 Insert Question Here A B C D E F G H 200 pts MusicScoreBack A Money that is wasted E B income that has no effect on aggregate demand. F C income that does not follow the circular flow. G D money that is retained by businesses. H income that does not follow the circular flow. Economists use the term "leakage" to refer to

3 Insert Question Here A B C D E F G H 300 pts MusicScoreBack A the economy is getting better. E B government spending is on the increase F C purchasing has slowed G D government has increased the money supply H purchasing has slowed High unemployment is usually a sign that

4 Insert Question Here A B C D E F G H 400 pts MusicScoreBack A Adam Smith E B Alan Greenspan F C Milton Friedman G D John Maynard Keynes H Which economist believed that the government should step in to stimulate aggregate demand in order to avoid or shorten economic recessions? 400

5 Insert Question Here A B C D E F G H 500 pts MusicScoreBack A demand-pull inflation E B cost-push inflation F C recessionary pricing G D too rapid expansion of the economy H cost-push inflation According to some economists, stagflation is caused by

Frictional unemployment frictional unemployment 1 Insert Question Here A B C D E F G H 100 pts MusicScoreBack A Cyclical unemployment E B Structural unemployment F C Seasonal unemployment G D Frictional unemployment H Temporary unemployment between jobs because of firings, layoffs, voluntary searches for new jobs, or retraining is called

2 Insert Question Here A B C D E F G H 200 pts Music ScoreBack A Cyclical unemployment E B Structural unemployment F C Seasonal unemployment G D Frictional unemployment H Ronald McDonald, who just graduated form Clown School, is looking to find his first real job Cyclical unemployment

3 Insert Question Here A B C D E F G H 300 pts Music ScoreBack A Cyclical unemployment E B Structural unemployment F C Seasonal unemployment G D Frictional unemployment H Seasonal unemployment Frosty the Snowman is expecting to be out of work shortly following the last big snow of the year

4 Insert Question Here A B C D E F G H 400 pts Music ScoreBack A Cyclical unemployment E B Structural unemployment F C Seasonal unemployment G D Frictional unemployment H Structural unemployment Workers at many nuclear power plants lost their jobs when power companies decided not to replace aging plants.

5 Insert Question Here A B C D E F G H 500 pts Music ScoreBack A Cyclical unemployment E B Structural unemployment F C Seasonal unemployment G D Frictional unemployment H Cyclical unemployment Sam I Am was laid off after orders for Green Eggs & Ham declined greatly following last years stock market crash

1 Insert Question Here A B C D E F G H 100 pts MusicScoreBack A loose money policy E B prime rate F C tight money policy G D discount rate H loose money policy When credit is inexpensive and easy to get, the Federal Reserve is probably using ___________.

2 Insert Question Here A B C D E F G H 200 pts Music ScoreBack A working through the regional Federal Reserve Banks E B changing reserve requirements F C issuing monthly money supply targets G D announcing a new prime rate H changing reserve requirements The Federal Reserve can affect the money supply by

3 Insert Question Here A B C D E F G H 300 pts MusicScoreBack A 1 E B 12 F C 25 G D 2,500 H 12 The number of district Federal Reserve banks in the United States is

4 Insert Question Here A B C D E F G H 400 pts MusicScoreBack A national banks E B thrift institutions F C savings and loans banks G D all financial institutions that take deposits H Which type of institution must belong to the Federal Reserve?

5 Insert Question Here A B C D E F G H 500 pts MusicScoreBack A monetary policy in the United States E B fiscal policy in the United States F C international monetary policy G D international financial policies H monetary policy in the United States The Federal Reserve is responsible for

1 Insert Question Here A B C D E F G H 100 pts MusicScoreBack A The business cycle quickly reaches a peak or boom E B The purchasing power of the dollar declines F C The value of a good declines with wear and tear G D The purchasing power of the dollar increases H The purchasing power of the dollar declines What happens when inflation occurs?

2 Insert Question Here A B C D E F G H 200 pts MusicScoreBack A production E B distribution F C competition G D inflation H The Consumer Price Index (CPI) is often used to measure ___________________.

3 Insert Question Here A B C D E F G H 300 pts MusicScoreBack A expansions E B fluctuations F C troughs G D depression H fluctuations The ups and downs in an economy are called

4 Insert Question Here A B C D E F G H 400 pts MusicScoreBack A occur about every 6 years E B occur irregularly F C always follow the same pattern G D are always preceded by periods of mild inflation H occur irregularly Business cycles in the United States

5 Insert Question Here A B C D E F G H 500 pts MusicScoreBack A that recovery is in progress E B the end of a business cycle F C the rise or fall in economic activity G D the start of a recession or depression H the rise or fall in economic activity When coincident indicators rise or fall, they indicate

1 Insert Question Here A B C D E F G H 100 pts Music ScoreBack A W E B X F C Y G D Z H W Which letter on the graph represents a boom in the business cycle?

2 Insert Question Here A B C D E F G H 200 pts Music ScoreBack A Member Banks E B Board of Governors F C Federal Advisory Council G D Federal Open Market Committee H Member Banks Members of which group on the Federal Reserve organization chart buy stock in a Federal Reserve Bank? Who are the shareholders? brdrnonebrdrnonebrdrnonebrdrnoneOrganization of the Federal Reserve System

3 Insert Question Here A B C D E F G H 300 pts Music ScoreBack A unemployment E B inflation F C production G D consumer spending H unemployment Which of the following results should be included where the question mark appears in the illustration?

4 Insert Question Here A B C D E F G H 400 pts Music ScoreBack A total of every ones income in a nation E B total of all business purchases of items used to produce other goods “capital goods”. F C total investments in the United States by people from other countries. G D total investments in other nations by United States citizens. H total of all business purchases of items used to produce other goods “capital goods”. In this equation, the “I” represents the GDP = C + I + G + X

5 Insert Question Here A B C D E F G H 500 pts Music ScoreBack A Banks will raise their loan interest rates, so people will borrow less. E B Sellers of expensive items will raise their prices. F C Inflation will increase, so the economy will go into a recession. G D Banks will have to meet a higher reserve requirement. H Banks will raise their loan interest rates, so people will borrow less. Why will the Fed’s action in the passage cause the result described? Like a driver applying a quick tap of the brakes, the Federal Reserve yesterday raised the cost of borrowing to keep the U.S. economy from running ahead too fast. As a result, consumers can expect to pay a little more when buying homes, cars, and other big-ticket items, as well as when carrying credit- card balances. Source: The Columbus Dispatch, July 1, 1999.