1. FrontPage: NNIGN The Last Word: Ch 12 Review/Quiz tomorrow

3.  The best measure of economic growth is not simply the amount of money a nation has or how much its population increases, but rather the increase in its real GDP.  Population influences economic growth, but can mislead economists if an increase in real GDP is simply a reflection of more workers contributing to the economy.  In order to get a clearer picture of economic growth, economists use the measure of real GDP per capita, which is real GDP divided by total population.

4. Factor 1 – Natural Resources  One factor in economic growth is access to natural resources, especially arable land, water, forests, oil, and mineral resources. Factor 2 – Human Resources  This is measured partly through labor input – the size of the labor force multiplied by the length of the workweek. Factor 3 – Capital  More and better capital goods (machinery, tools) increase economic output. Factor 4 – Technology and Innovation  These promote the efficient use of other resources, which in turn leads to increased output.

5.  Productivity refers to the amount of output produced from a set amount of inputs.  Several factors contribute to changes in productivity:  Quality of Labor  Technological Innovation  Energy Costs  Financial Markets

6.  The government, through fiscal policy –  Government taxing and spending policies that influence macroeconomic conditions.  Attempt to improve unemployment rates, control inflation, stabilize business cycles and influence interest rates in an effort to control the economy.  Fiscal policy is largely based on the ideas of British economist John Maynard Keynes (1883–1946), who believed governments could change economic performance by adjusting tax rates and government spending. ▪ The term Keynesian economics derived from his ideas

7.  Created by the U.S. Congress in 1913.  The Fed is an independent entity, but is subject to oversight from Congress. ▪ Decisions do not have to be ratified by the President or anyone else in the government, but Congress periodically reviews the Fed's activities.  Controls monetary policy in the United States  The actions that determine the size and rate of growth of the money supply, which in turn affects interest rates.  Monetary policy is maintained through actions such as modifying the interest rate, buying or selling government bonds, and changing the amount of money banks are required to keep in the vault (bank reserves).

10.  Inside the Fed  https://www.youtube.com/watch?v=I2m3t2Yr8Vg https://www.youtube.com/watch?v=I2m3t2Yr8Vg