ECON 2020 ACTUAL EXAM
QUESTIONS AND COMPLETE STUDY
GUIDE 2026
▶ Monetary Policy. Answer: The FED- Creating/Controlling the Money
Supply
The actions the FED takes to manage the money supply and interest rates
▶ The supply of money in the economy=. Answer: currency+ balances in
checking-type accounts
▶ The supply of money in the economy is important for.... Answer: ...price
stability, economic growth, high
employment, and stability of financial
markets and institutions.
▶ fiscal policy. Answer: Congress and the President- Spending and
Taxation
-Changes in federal taxes and
purchases that are intended to help
the economy work better
-Fiscal Policy refers only to the
actions of the federal government
(Congress and the President).
▶ what is money?. Answer: -a medium of exchange
-a measure of value
-a store of value (potential
SERVES EVERYONE'S BEST INTEREST
▶ characteristics of successful mediums of exchange.... Answer: stability,
durability, divisibility, portability, recognizable
, ▶ what is economic growth?. Answer: Economic Growth occurs when
there is a sustained increase in real GDP.
When the nation's overall standard of living increases
-The overall standard of living refers to not just the
individuals who have improved their human capital, but all of their fellow
citizens as well.
▶ what is GDP?. Answer: -GDP= Gross Domestic Product
-The basic measure of a nation's economic
output and income
-The value of all final goods and services
produced within a country's national
borders in a year
-GDP is a measure of overall economic
performance
▶ Nominal vs real GDP. Answer: Nominal: GDP not adjusted for inflation
Real: GDP adjusted for inflation
-Calculations are adjusted for price changes
-Year to year comparisons
-Nominal Rate-Inflation Rate= Real rate
▶ GDP equation/ how do you calculate GDP?. Answer: GDP= C+I+G+(X-
M)
(C) Consumption: The amount spent by households on goods and
services. Includes durable (cars, food, clothes, etc) and non-durable
(haircuts, dentist appointments, etc) goods. Makes up 2/3rds of GDP
spending
(I) Investment: Spending by businesses on machinery, factories,
equipment, tools. Spending by households on new homes.
(G) Government: Spending by all levels of government on goods and
services. Includes spending on military, schools, and highways.
(X-M) Net Exports: Spending by people abroad on U.S. goods and services
(exports, or X) MINUS spending by people in the U.S. on foreign goods and
services (imports, or M)
▶ what is a $10 bill worth?. Answer: $10 worth of goods and services
QUESTIONS AND COMPLETE STUDY
GUIDE 2026
▶ Monetary Policy. Answer: The FED- Creating/Controlling the Money
Supply
The actions the FED takes to manage the money supply and interest rates
▶ The supply of money in the economy=. Answer: currency+ balances in
checking-type accounts
▶ The supply of money in the economy is important for.... Answer: ...price
stability, economic growth, high
employment, and stability of financial
markets and institutions.
▶ fiscal policy. Answer: Congress and the President- Spending and
Taxation
-Changes in federal taxes and
purchases that are intended to help
the economy work better
-Fiscal Policy refers only to the
actions of the federal government
(Congress and the President).
▶ what is money?. Answer: -a medium of exchange
-a measure of value
-a store of value (potential
SERVES EVERYONE'S BEST INTEREST
▶ characteristics of successful mediums of exchange.... Answer: stability,
durability, divisibility, portability, recognizable
, ▶ what is economic growth?. Answer: Economic Growth occurs when
there is a sustained increase in real GDP.
When the nation's overall standard of living increases
-The overall standard of living refers to not just the
individuals who have improved their human capital, but all of their fellow
citizens as well.
▶ what is GDP?. Answer: -GDP= Gross Domestic Product
-The basic measure of a nation's economic
output and income
-The value of all final goods and services
produced within a country's national
borders in a year
-GDP is a measure of overall economic
performance
▶ Nominal vs real GDP. Answer: Nominal: GDP not adjusted for inflation
Real: GDP adjusted for inflation
-Calculations are adjusted for price changes
-Year to year comparisons
-Nominal Rate-Inflation Rate= Real rate
▶ GDP equation/ how do you calculate GDP?. Answer: GDP= C+I+G+(X-
M)
(C) Consumption: The amount spent by households on goods and
services. Includes durable (cars, food, clothes, etc) and non-durable
(haircuts, dentist appointments, etc) goods. Makes up 2/3rds of GDP
spending
(I) Investment: Spending by businesses on machinery, factories,
equipment, tools. Spending by households on new homes.
(G) Government: Spending by all levels of government on goods and
services. Includes spending on military, schools, and highways.
(X-M) Net Exports: Spending by people abroad on U.S. goods and services
(exports, or X) MINUS spending by people in the U.S. on foreign goods and
services (imports, or M)
▶ what is a $10 bill worth?. Answer: $10 worth of goods and services
