Directions: Work in your groups to complete the review guide. There are two sections,
Economic Policies and Economic Measures. Complete both sections and analyze the political cartoon provided at the end of the review guide.
TOPIC: ECONOMIC POLICIES
Vocabulary Definitions:
Name: _________________________________________________
Government Economics Review Guide
1.
Fiscal Policy – President and Congress influencing the economy through government spending
2.
Monetary Policy – Federal Reserve influencing the economy by controlling the money supply
3.
Neoclassical Policy – Decrease government spending, decrease taxes on the wealthy
4.
Keynesian Policy – Increase government spending, decrease taxes on the poor
5.
Expansionary Policy – Federal Reserve expands the money supply, interest rates go down, helps improve the economy
6.
Contractionary Policy – Federal Reserve reduces the money supply, interest rates go up, slows down the economy to combat inflation
Questions
1.
Which political party supports Neoclassical economics? Name a President associated with Neoclassical economics.
Republicans, Ronald Reagan
2.
Which political party supports Keynesian economics? Name a President associated with Keynesian economics.
Democrats, Franklin D. Roosevelt

Entity in Charge
Length of Impact
Item Impacted
Fiscal Policy
President/Congress
Short Term
Government Spending
Monetary Policy
Federal Reserve
Long Term
Money Supply
Types Neoclassical, Keynesian Expansionary, Contractionary
TOPIC: ECONOMIC MEASURES
Vocabulary Definitions:
1.
GDP – Gross Domestic Product, measures in dollars the final amount of goods and services produced by a country
2.
CPI – Consumer Price Index, measures change in prices over time
(inflation/deflation)
3.
Inflation – Sustained increase in prices over time
4.
Deflation – Sustained decrease in prices over time
Measures
Formula
Economic Health
Production
GDP
Sum of all final goods and services produced
Up: Good
Down: Bad
Up: Good
Down: Bad
CPI
Inflation and Deflation
(New Price/Old Price)*100

POLITICAL CARTOON ANALYSIS
Directions: List three symbols that you see in the political cartoon. Shortly describe the message of the political cartoon.
1.
2.
Message:
3.