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Civics Test
| Question | Answer |
|---|---|
| how is unemployment rate measured? | umemployed divided by civillian labor force |
| what is civillian labor force? | people of the age of 16 employed or looking for work |
| what is and what was the unemployment rate? | it is currently 6% after it was at 16% bc of covid |
| how is labor force participation rate measured? | civilian labor force divided by non institutional population |
| what is non institutional population? | everyone of the age of 16 avilable to work, not including people retired, in the military, or in jail |
| what is the non institutional rate percent? past and present | 58% in the 1950s, 67% in early 2000s, currently 63% |
| what is inflation rate? | a general trend for an overall increase in prices |
| how is inflation measured? | Consumer Price Index (CPI) |
| explain the CPI | is compiled by the government, measuring the monthly prices of 90,000 products, divided into “baskets” of products. |
| how many locations in the CPI meaured in? | 85 |
| what is the current inflation rate? | 2.6%, the federal reserve bank wants to bring it down to 2% |
| describe the degrees of inflation | Mild inflation-1-5% (normally healthy) Strato-inflation: about 10 % to several hundred % (unhealthy) Hyperinflation: breakdown of the monetary system (printing too much money) (destructive) |
| deseribe GDP | GDP “Gross Domestic Product” is a measurement of the economy which adds up the value of all… consumption (C) investment (I) government spending (G) and net exports (exports minus imports) (NX ) |
| when is GDP produced? | within the national borders of a country in one year. |
| how is per capita GDP measured? | a nations GDP divided by a nations population |
| what does a nation have to do to get the real GDP? | remove inflation from previous years |
| what is the primary goal of a business? | to maximize profits |
| why are antitrust laws put into place? | to stop uncompetitive monopoly power |
| describe perfect competition | identical products, Pure Competition Large number of buyers and sellers competing with Identical product Agricultural or Produce products grown on farms Very competitive Vegetables, fruit, livestock, dairy, etc. |
| describe inperfect competition | differentiated or products with slight differences |
| describe monopolistic competition | Very competitive market where many companies sell slightly different products Often engage in competition through major advertising Fast food, clothing, makeup, shampoo, almost everything you buy is within this very competitive form of competition. |
| desribe oligopoly | A few very large sellers dominate the industry Sometimes they engage in price wars, which can be very damaging to the company, but great for customers Soft drinks, mobile phone services, commercial aircraft, airlines,beer |
| what is collusion? | some oligopolies formally agree to set prices |
| desribe monopoly | Only one seller of a particular product There are very few monopolies because many government regulations limit them, or make them illegal. |
| what is the sherman antitrust act? | One seller dominates the market for a product with at least 75% control |
| describe natural monopoly | a monopoly in which it is more efficient and economically sensible to have one company offering the service, such as utilities like electricity water and sewerage. |
| describe government monopoly | a government agency is the sole provider of a particular good or service and competition is sometimes prohibited by law. |
| describe technological monopoly | occurs when one company controls manufacturing methods or has rights/patents to exclusively produce it. |
| describe antitrust exemption monopoly | Companies that are considered sporting events or exhibitions, or are not a form of commerce, thus do not need to be limited. |
| describe geographic monopoly | A condition that exists where one company is the sole provider of a good or service in an isolated area. |
| what is the federal reserve? | A central bank is the government agency that oversees the banking system and is responsible for the amount of money and credit in the economy. |
| what year was the federal reserve created? | 1913 |
| what name is the federal reserve better known by? | the FED |
| how many members of the board of governors does the president appoint? | 7 |
| who approvs the chairman? | the senate |
| what does member banks appoint? | 5 bank presidents to the FOMC (Federal Open Market Committee). |
| what does the FOMC conduct? | monetary policy |
| what does the FED regulate? | our banking industry and controls interest rates that banks charge for loans. |
| who is the current chairman of the FED? | Jerome Powell since feb. 5th 2018 |
| how many districts is the FED divided into? | 12 |
| what district is new orleans? | 6th |
| what is monetary policy? | the process by which the central bank of a country controls the supply of money, availability of money and the cost of borrowing money (interest rates). |
| what is the FEDs main monetary policy tools? | interest rates |
| what is the prime lending rate? | the interest rate that banks charge to their best “prime” customers. (currently at 3.25%) |
| what is the discount rate? | The interest rate charged by the FED to its member banks (.25%) |
| what is open market operations? | is the buying and selling U.S. government securities (government bonds) to raise and lower the money supply. |
| what is the reserve requirment | regulation that sets the minimum percent of customer deposits that each bank must store out of circulation within the FED’s vaults. The current rate for all banks is set at 0% since March of 2020 because of the Covid-19 recession. |
| what is the goal of the FED? | to create maximum employment and stable prices. |
| what is the federal funds rate? | he interest rate charged by banks to loan money to other banks (currently also at .25%) |
Created by:
caley wehner
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