Government and the economy

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Government and the economy by Mind Map: Government and the economy

1. fiscal policy

1.1. spending

1.1.1. Increase in spending = increase in economic growths

1.1.2. Decrease in spending = decrease in economic growth

1.2. taxation

1.2.1. Increase in taxes = slow economic growth

1.2.2. Decrease in taxes = increase in economic growt

2. government regulation

2.1. low unemployment, price, stability, and economic growth

2.2. to high=suplurs

2.3. to low =sortage

2.4. electricity, highways, police, fire protection=natural monopolies

3. business cycle

3.1. expansion=GDP is increasing

3.2. peak=reaches highest current level

3.3. contraction=decreasing economic activity

3.4. trought=transition from contraction to an expansion pahe

4. federal reserve organization

4.1. board of governors=analyze economic data,supervises federal reserve banks

4.2. federal open market committee=discusses economic outlook and potential adjustment to money supply

4.3. federal reserve banks=provides service to banks and the u.s treasury (bankers bank)

4.4. member banks=receive services from regional federal reserve bank

4.5. other depository institutions=includes credit unions, savings, and student loans associations, commercial banks, and savings banks

5. monetary policy

5.1. discount rate

5.1.1. decreasing=members barrow more money=banks loan more money to people

5.1.2. increasing= members barrow less=less loans available

5.2. reserve requirements

5.2.1. decreasing=less money in vault=loan more money to people

5.2.2. increasing=more money in vault=less loan available

5.3. open market operations

5.3.1. buy bonds=FED gives banks money for bonds=banks loan more money

5.3.2. sell bonds=gets money from bank-less loans available e