Fiscal Policy - Assignment #1

Fiscal Policy - Assignment #1 - ECONOMICS REVIEW FOR FISCAL...

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ECONOMICS REVIEW FOR FISCAL POLICY TEST I. Older Stuff a. The three main types of unemployment are structural unemployment, frictional unemployment, and cyclical unemployment with inflation being the primary concern of economic policymakers because of its correlation with the demand for goods. b. The three broad macroeconomic goals are to balance inflation real GDP growth, with price stability, and unemployment rate (preferably around 4 %). c. The three most common types of economic systems are Traditional, Command, Market with the U.S.A. being a mixed market economy because of a little government intervention. II. Economic Indicators a. GDP is calculated by adding up Consumption, Investment, Government spending, and Net exports (which is exports minus imports) b. The three things not included when calculating GDP include intermediate goods, financial transactions (public/private transfer payments), and black market goods. c. The four stages of the business cycle are expansion, peak, contraction and trough. d. During this stage, peak , the economy is performing very well and the unemployment rate is very low, but inflation becomes a problem. In this stage, the government needs to shut down (stimulate or shut down) the economy. e. During this stage, the opposite of the peak is true. The unemployment rate continues to be a concern, but prices are under control. In this stage, the government needs to stimulate (stimulate or shut down) the economy.
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This note was uploaded on 10/01/2011 for the course ECON 2106 taught by Professor Banzhaf during the Spring '06 term at Georgia State University, Atlanta.

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Fiscal Policy - Assignment #1 - ECONOMICS REVIEW FOR FISCAL...

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