Vocabulary  2         

Vocabulary Puzzle Page

budget deficit                                     fiscal policy                     inflation   

present federal deficit                      monetary policy

current account  trade deficit          baby boomer

Alan Greenspan, Chairman of the Federal Reserve Board is slated to retire on January 31, 2005, according to the Globe & Mail 12/03/05.  Greenspan has been critical of the US Government for it's failure to deal successfully with the ever increasing budget deficit.  He did say that the United States had been successful in financing its current account trade deficit.  At the same time, Greenspan was especially concerned with rising protectionism, which could impede the flow of goods across the U. S. borders. 

He warned that there was a pernicious drift towards fiscal instability in the United States and elsewhere.  The International Monetary Fund is especially concerned with gobal external imbalances.   The IMF predicted that interest rates will have to rise in the coming months to keep inflation under control.  Mr. Greenspan said that budget deficits will surely soar in order to address baby boomer requirements. 

If you are pondering  your financial future, you will need to do some financial planning in order to make sense out of where you think you are going.  If your debt load is too high, you will have little room to manoeuvre.  Your debt service obligations will prove onerous.  If you have a substantial equity in your home, you may be able to increase your mortgage and use the funds gained to pay down high interest costs such as revolving credit card debt.. 

A budget deficit occurs when expenditures exceed ___.   The present U.S. Federal deficit topped $374 billion in 2003 due to a slowing ___ and ___ on the Iraq war.  Major tax cuts were a ___.

The present U.S. trade deficit of  $144.9 billion in the first quarter of 2005, reflect American desire for ___

goods. 

Fiscal policy describes the government's attitude towards raising money to fund current ___.

Monetary policy is concerned with managing the ___ to achieve specific goals.

A.  contributing factor     B.  economy   C.  expenditures   D.  foreign-made    E. income   F. money supply         

Answers

Vocabulary 1