macro 1

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    What defines macroeconomics?

    It studies the economy as a whole, focusing on growth, recessions, and unemployment.

    What was the peak of economic growth in the US during the late 1980s?

    The peak occurred in 2006 before the onset of the Great Recession.

    How did the Great Recession affect unemployment?

    Unemployment doubled from 7.5 million to 15 million during the recession.

    What is real GDP?

    It measures the total value of goods and services produced, adjusted for price changes.

    What happens to unemployment during a recession?

    Unemployment typically increases as businesses lay off workers.

    What is the relationship between inflation and economic activity?

    Inflation tends to rise before a recession and decrease during it.

    What is fiscal policy?

    It involves government spending and tax policies to influence the economy.

    What is the significance of the Federal Reserve's interest rate adjustments?

    They influence borrowing costs and overall economic activity.

    What characterizes economic recessions?

    They are periods of declining economic activity lasting at least six months.

    What is the impact of economic growth on living standards?

    Economic growth generally leads to improved living standards.

    How does the government stimulate the economy during a recession?

    By reducing taxes and increasing government spending.

    What is the role of technology in economic growth?

    Technological advancements enhance productivity and economic output.

    What is the difference between nominal and real interest rates?

    Nominal rates do not account for inflation, while real rates do.

    What are business cycles?

    They consist of alternating periods of economic expansion and contraction.

    What is the effect of a high inflation rate on investment?

    High inflation creates uncertainty, discouraging investment.

    What is the significance of the Great Depression?

    It was the most severe economic downturn in US history, with massive unemployment.

    What is the purpose of monetary policy?

    To control the money supply and stabilize inflation.

    What factors contribute to long-term economic growth?

    Increases in labor, capital, and technological progress.

    What is the relationship between GDP and economic well-being?

    Higher GDP typically indicates better economic well-being for the population.

    What are the main goals of macroeconomic policy?

    To promote long-term growth and minimize short-term economic fluctuations.