Summary: Bus 1002 Week 10
- This + 400k other summaries
- A unique study and practice tool
- Never study anything twice again
- Get the grades you hope for
- 100% sure, 100% understanding
Read the summary and the most important questions on BUS 1002 Week 10
-
1 Recessionary Gap
-
What occurs when actual output is less than potential output?
A recessionary gap occurs when actual output (Y) is less than potential output (Y*). -
What does a recessionary gap indicate about resources?
Resources like workers, machines, and land are underutilized due to insufficient demand. -
Why are resources not fully utilized during a recessionary gap?
Resources are not fully utilized because there is not enough demand for goods and services. -
2 Keynesian Model
-
What are 'PRESET PRICES'?
Firms typically maintain fixed prices and adjust production to meet demand. -
Why do firms use preset prices?
Constantly changing prices is costly and inconvenient due to MENU COSTS. -
What are examples of MENU COSTS?
Examples include determining new prices and updating systems and menus. -
3 Planned Aggregate Expenditure (PAE)
This is a preview. There are 4 more flashcards available for chapter 3
Show more cards here -
What are the four components of planned aggregate expenditure?
The four components are C, I, G, and NX. -
What does C represent in planned aggregate expenditure?
C stands for consumption, which is household spending on goods and services. -
What does I^p stand for in the context of PAE?
Planned investments made byfirms regardingcapital goods . -
What does G refer to in planned aggregate expenditure?
G indicates government spending on public services and infrastructure.
- Higher grades + faster learning
- Never study anything twice
- 100% sure, 100% understanding
Topics related to Summary: Bus 1002 Week 10
-
Recessionary Gap
-
Keynesian Model
-
Planned Aggregate Expenditure (PAE)
-
Stabilization Policy
-
Supply-Side Effects of Fiscal Policy
-
Fiscal Policy and Deficit Spending - Why do deficits matter?
-
Fiscal Policy Flexibility - Time delays in policy action
-
Fiscal Policy Flexibility - Competing political priorities
-
Fiscal Policy Can Be Effective
-
The Fed - Analysts forecast Fed decisions
-
The Fed - Monetary policy as a Stabilization tool
-
The Fed - Money supply and demand determine the interest rate
-
The Fed - Portfolio allocation decisions
-
The Fed’s Primary Task - Demand for Money
-
The Fed’s Primary Task - Benefit of holding money
-
The Fed’s Primary Task - Cost of holding money
-
The Fed’s Primary Task - Business demand for money
-
The Fed’s Primary Task - Key determinants of money demand
-
The Fed adjusts the interest Rates - Why the Fed talks rates
-
The Fed adjusts the interest Rates - Why the Fed announced policy in interest-rate terms
-
Role of the Federal Funds Rate
-
Additional Tradition Tools over The Money Supply - Discount Window Lending
-
Additional Tradition Tools over The Money Supply - Reserve Requirements
-
Excess Reserve
-
Do Interest Rates always move together?
-
Additional Tools at the Zero Lower Bound - Quantitative Easing (QE)
-
Additional Tools at the Zero Lower Bound - Forward Guidance
-
Additional Tools at the Zero Lower Bound - Interest on Reserves (IOR)
-
The Fed Fights Inflation
-
Monetary Policy and the Stock Market
-
Policymaking: Art or Science?

















