Econ Unit 3

Which of the following best describes the National Debt

It is what we owe, the sum of the budget deficit each year.

Which of the following terms describes the situation when the United States spends more money than it brings in, over the period of a year.

budget deficit

Which of the following describes the scenario in which the government spends less than its revenue in a given year?

budget surplus

expansionary monetary policy

greater money supply - be careful of inflation

fiscal policy

how much the government brings in, in money, and how much they spend

The main source of Revenue for the United States government is...

income taxes

Which of the following is a problem with Fiscal Policy

it can take too long to come to a solution

Which of the following is a main source of revenue for local governments?

property taxes

A flat tax is an example of which type of tax?

proportional tax

An Excise tax, or any type of monetary tax is considered a

regressive tax

Which type of tax best describes the following statement. "As income increases, the percentage of income paid in taxes decreases."

regressive tax

state:

roads health social services

aggregate demand

size of the economy

open market operations

the Fed buying and selling bonds to banks

reserve requirements

the Fed can decide how much money banks are required to hold onto if the RR increases, banks have to hold more money, so the economy slows down

discount rate

the cost of borrowing money from the Fed

local:

utilities safety parks & rec

Local Governments spend most of their money in which of the following categories?

utilities such as water and sewer

expansionary fiscal policy

wants to make economy bigger - tax cuts - increased government spending

contractionary fiscal policy

wants to slow economy down - increase taxes - decrease government spending

purpose of the government

1. maintain social order 2. provide public services 3. military/ national security 4. make economic decisions

roles of money

1. medium of exchange 2. store of value 3. unit of account

macrogoals

1. stable prices 2. low unemployment 3. growth

Why are many economists concerned with the level of spending on programs such as Medicare and Social Security?

They are concerned because that takes up a large amount of the governments spendings.

The Benefit Principle states which of the following?

Those who benefit from taxation should pay for it

tax

a mandatory payment to a government

Which of the following is used to refer to the total demand for goods and services in the economy. (The overall size of the economy.)?

aggregate demand

types of money

commodity money commodity-backed money fiat money

Which type of fiscal policy is directed towards preventing the economy from growing too fast?

contractionary fiscal policy

If the economy has been in a recession, and the Federal government wants to jump start the economy, what is one way that it can be done? Please answer in complete sentences.

decrease taxes

What is one of the ways that the government can increase the size of the economy?

decrease taxes

Which governments collect income tax?

federal and state

Which of the following terms describes attempts by the national government (congress) to intervene in the economy.

fiscal policy

contractionary monetary policy

lower money supply - be careful of recession

monetary policy

managing the economy by altering the supply of money and interest rates

federal:

medicare medicade social security military

Which of the following is an example of discretionary spending by the U.S. Government?

military and defense

debt

money owed

deficit

money we spend, but don't have (year)