Unit 4 Study Guide

Unit 4 Study Guide
Directions—Define the terms on the back of this paper and answer the questions, and you will do great on the test.
You must number the terms, or you will lose a point.
1 Federal Reserve System
2 aggregate supply
3 trough
4 fiat money
5 money market mutual fund
6 leading indicators
7 default
8 depreciation
9 contraction
10 interest
11 national income accounting
12 principal
13 recession
14 stagflation
15 What is a mortgage used to purchase?
16 Why is using coins as money easier than using gold bars?
17 What condition is necessary for a fiat money system to work?
18 What is the largest source of income for banks?
19 What is something that serves as money but has alternative uses called?
20 _______________ is something that serves as money but has no other uses
21 An example of ownership in a company is (not a partnership or proprietorship)
22 A stock split is most likely to occur when
23 A bear market is?
24 Your friend Jorge has just inherited $1000 and would like to invest the money in the stock market. You suggest that he invests
how?
25 Structural unemployment is when
26 What does it mean when a person is underemployed?
27 Frictional unemployment is when
28 The natural rate of unemployment (NRU) is between what percent and what percent?
29 If Jackson is paid an interest rate of 10% on his savings, but the inflation rate has risen to 20%, the purchasing power of his savings
has done what?