Economics, Money, and Banking Flashcards

Practice flashcards covering key macroeconomic concepts, factors of production, and monetary policy based on Chapter 2: Economics, Money, and Banking.

What are the five factors of production?

Natural resources, human resources, capital, entrepreneurship, and knowledge.

How is gross domestic product (GDP) defined?

The value of all the final goods and services produced by businesses located within a nation's borders, excluding outputs from overseas operations of domestic companies.

How is a recession defined?

A period during which national income, employment, and production all fall, defined specifically as at least six months of decline in the GDP.

What is the difference between the federal funds rate and the discount rate?

The federal funds rate is the interest rate member banks charge each other to borrow money overnight from Federal Reserve accounts, while the discount rate is the interest rate member banks pay when borrowing funds directly from the Fed.