Shared Flashcard Set
Cards
Term
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Definition
| countries that incorporate both capitalist and socialist practices in the workings of their economies; government regulation and private ownership |
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| why the public expects some government intervention in the economy |
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Definition
| in order to stimulate the economy and keep it working |
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| government's actions to regulate the economy through taxing and spending policies |
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Definition
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| How does fiscal policy affect the economy? |
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Definition
| spending money on government programs and cut taxes boosts the economy in times of recession |
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| controlling the amount of money that is in the flow of the economy |
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| Who makes monetary policy? |
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| it is headed by the Federal Reserve whose members are chosen by the president; head of Federal Reserve is Ben Bernanki |
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| How does Monetary policy affect the economy? |
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Definition
| when it buys government bonds it puts money into the economy; when they sell they take out money. When they lower interest rates of the banks, they put money into the economy by encouraging borrowing; when they increase the rates they fear the economy is growing too rapidly and discourage buying. When they increase the reserve requirement for banks they take money out of the economy; when they lower the reserve requirement for banks they put money into the economy |
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