Answer the questions in short answer format. 20 points each.
- What is inflation? How is it calculated? Is every price increase considered inflation?
- What is GDP? What are the components (C,G,I,Xn)? Which component is the largest contributor to GDP? Which is the smallest (or negative) contributor to GDP?
- What is a recession? In the United States, who determines a recession?
- What happens to GDP in a recession? Why?
- What can the United States Congress/President do to stop and rescue the nation from a recession? List and briefly explain 3 (Hint: look up fiscal policy and/or monetary policy)