Exam 4 Econ 2210

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In your current job, you earn $55,000. You take the standard deduction of $12,200. You have an offer of a new job working for a different employer. Your salary would go up by $5,000. How much extra will you owe in federal income taxes if you take the new job?

$1,100

The standard deduction for a single person is $12,200. Based on this table, if your total income is $47,000, what is the amount of tax you will pay on your taxable income?

$3,982

The slope of the consumption function is the:

. marginal propensity to consume.

How is monetary policy different from fiscal policy?

Monetary policy adjusts interest rates, whereas fiscal policy adjusts government spending and taxes.

An excise tax is a tax on:

a specific product.

The liquidity of an asset is defined as the:

ability to quickly and easily convert the asset to cash, with little or no loss in value.

Credit constraints limit the:

amount of money that people can borrow.

Future value is the:

amount that your money will grow into by a future date as a result of earning interest.

A mutual fund is a fund that:

buys a portfolio of stocks and bonds on your behalf.

Depreciation refers to the:

decline in capital due to wear and tear, obsolescence, accidental damage, and aging.

The loanable funds market is the market for:

funds used to buy, rent, or build capital.

Discretionary spending is spending that:

is appropriated by Congress annually.

Hand-to-mouth consumers:

live paycheck to paycheck.

Forward guidance occurs when the Federal Reserve:

provides information about the future course of monetary policy in order to influence expectations about future interest rates.

Investment refers to:

spending on physical capital.

The three major pillars of the financial sector are the:

stock market, the bond market, and the banks.

Mandatory spending is spending that:

supports programs that do not get determined annually but instead are set in law.

What is the Federal Reserve's mandate?

to ensure maximum employment while maintaining stable prices


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