1. Macroeconomics that part of economic theory dealing with the economy as a whole and decision making by large units such as governments and unions Click here to watch video

2. Federal Reserve System On December 23, 1913- Congress passed legislation creating the Federal Reserve System (FED) – America’s central bank. The Responsibilities of FED Include- 1) Provides financial services to the government 2) Regulates financial institutions 3) Maintains the payment systems 4) Enforces consumer protection laws 5) Conducts monetary policy -Responsibilities range from supervising banks to clearing checks to maintaining the money supply and enforcing consumer Legislation -owned by private banks not the government -member banks- banks that belong to the Federal Reserve system- all national banks

5. Monetary policy- actions by the Federal reserve System to expand or contract the money supply in order to affect the cost and availability of credit. It involves controlling the expansion and/or contradiction of the money supply to influence the cost and availability of credit – influencing economic activity. Fiscal Policy- use of government spending and revenue collection measures to influence the economy Unemployment Economic growth, full employment, and price stability are three of the seven major goals of the American people. Unemployment- state of working for less than one hour per week for pay or profit in a non-family 1) Structural unemployment- unemployment caused by a fundamental change in the economy that reduces the demand for some workers. 2) Cyclical unemployment- unemployment directly related to swing in the business cycle. 3) Frictional unemployment- unemployment caused by workers changing jobs or waiting to go to new ones.

6. Stagflation- a period of stagnant growth and inflation Inflation- rise in the general level of prices Deflation- decrease in the general level of prices

7. Gross Domestic Product - Gross Domestic Product- the dollar amount of all final goods and services produced within a country’s national borders in a year – most comprehensive statistics kept concerning the economy’s performance.

8. Consumer/Producer Price Index -Consumer Price Index- index used to measure price changes for a market basket of frequently used consumer prices. - Reports on price changes for about 90,000 items 64 categories – compiled monthly by the Bureau of Labor Statistics -Producer Price Index- measures price changes received by domestic producers for their output – reported monthly by the Bureau of Labor Statistics.