Deutschmann Econ HW

The Federal Bank

a bank that is owned by the government of a particular country, especially a central bank (= bank used by the government to control the amount of money in the economy, control interest rates, etc.)

inflation

a general increase in prices and fall in the purchasing value of money.

entitlement***

a government program that provides benefits to any individual meeting certain eligibility requirements. ***social security

supply-side economics

a macroeconomic theory that argues economic growth can be most effectively created by investing in capital and by lowering barriers on the production of goods and services.

recession***

a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters ***2008, gas prices rose exponentially (mrs D paying for gas v. her mother)

customs duty

a tariff or tax imposed on goods when transported across international borders.

regressive tax***

a tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases. ***higher income owners pay lower proportion ex, SOCIAL SECURITY

gift tax***

a tax imposed on the transfer of ownership of property. ***2 types: (1) the annual gift tax exclusion, and (2) the lifetime gift tax exemption.

Progressive tax***

a tax in which the tax rate increases as the taxable amount increases. ***Wealth/Property tax

estate tax

a tax levied on the net value of the estate of a deceased person before distribution to the heirs

continuing resolution

a type of appropriations legislation

surplus***

an amount of something left over when requirements have been met; an excess of production or supply over demand. ***consumer profits from dropping oil prices w SURPLUS

public debt***

any money owed by a government agency ***money owned by city to pay for something ex new building

reserve requirement

is a central bank regulation employed by most, but not all, of the world's central banks, that sets the minimum amount of reserves that must be held by a commercial bank. ***a bank has 100million, reserve requirement is 10%, the bank must keep 10million

interest***

money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt. ***Interest Rate = (Total Repayment Amount - Amount Borrowed) / (Amount Borrowed)

demand-side economics

of, relating to, or being an economic theory that advocates use of government spending and growth in the money supply to stimulate the demand for goods and services and therefore expand economic activity — compare supply-side.

deflation

reduction of the general level of prices in an economy.

open market operations

refers to the buying and selling of government securities in the open market in order to expand or contract the amount of money in the banking system, facilitated by the Federal Reserve (Fed).

payroll tax***

taxes imposed on employers or employees, and are usually calculated as a percentage of the salaries that employers pay their staff. ***FEDERAL INCOME TAX

excise tax

taxes paid when purchases are made on a specific good, such as gasoline.

controllable spending***

the 30 percent of the yearly budget that the president and congress have control over ***POTUS decides what to spend money on

uncontrollable spending***

the 70 percent of the yearly budget that is required by law or earlier obligations to be spent ***the rest of money distributed to businesses

deficit***

the amount by which something, especially a sum of money, is too small. ***expenditure exceeds revenue

GDP

the broadest quantitative measure of a nation's total economic activity

The Federal Reserve

the central bank of the United States; The Fed, as it is commonly known, regulates the U.S. monetary and financial system.

monetary policy

the macroeconomic policy laid down by the central bank.

fiscal policy

the means by which a government adjusts its spending levels and tax rates to monitor and influence a nation's economy.

discount rate

the minimum interest rate set by the Federal Reserve for lending to other banks.