Economics 16-20

What are greenbacks? demand notes printed by the federal government during the Civil War the first demand notes printed by the Federal Reserve money that has its value because it is tied to a commodity money that is printed by banks instead of the government

demand notes printed by the federal government during the Civil War

The dollar can be broken down into cents. What characteristic is the dollar displaying in this example? divisible durable transferable portable

divisible

What is a significant expense for states but not for the federal government? education military veteran benefits social security

education

What is money created by government decree? fiat money commercial bank money fiduciary money commodity money

fiat money

a regular payment dispersed to an individual during retirement from an investment fund to which an individual or employer has contributed Which is being defined? pension premium dividend equity

pension

What are the functions of a finance company? (Select all that apply.) purchase installment contracts from merchants provide loans directly to consumers provide certificates of deposit to merchants purchase mutual funds from a collection of investors

purchase installment contracts from merchants provide loans directly to consumers

What is the definition of risk? the possibility of losing value on an investment the rate of return on an investment the value of interest rates at the time of investment the liquidity of an investment

the possibility of losing value on an investment

_[blank]_ of the Constitution states that the government's collection of income taxes is legal. Which accurately completes the sentence? Amendment XVI Amendment XIX Article I Article II

Amendment XVI

Which noteworthy legislation limited how much banks could earn from investments, such as the selling of securities, and also established the Federal Deposit Insurance Corporation (FDIC)? Banking Act of 1933 Federal Reserve Act of 1913 International Banking Act of 1978 Competitive Equality Banking Act of 1987

Banking Act of 1933

Which is true regarding recent banking innovations? (Select all that apply.) Banking apps can be set to alert account holders of low balances. Banks only accept deposits via an app or ATM machine. Banks have stopped offering checking accounts. People can deposit checks without visiting a bank.

Banking apps can be set to alert account holders of low balances. Banks only accept deposits via an app or ATM machine. PARTIAL

What services do commercial banks provide? (Select all that apply.) Banks offer customers checking and savings accounts. Banks offer customers investment accounts and services. Banks offer customers a place to prepare and file tax returns. Banks offer customers the ability to borrow money through loans.

Banks offer customers checking and savings accounts. Banks offer customers investment accounts and services. PARTIAL

What impact could the opening of a military base have on a local economy? Businesses would spring up to meet the needs of those on the base. The competition from the base would force local businesses to close. Police officers would be laid off since security would be provided by the military. Unemployment would increase as government spending would decrease.

Businesses would spring up to meet the needs of those on the base.

What problem does the president face when presenting a budget to Congress? Congress could pass the budget, but it may not agree with the president's priorities. The president has until January 1 after the previous fiscal year to present the budget. Emergencies may arise, but Congress cannot exceed the spending cap set every year. The president has to push the budget through the Committee on Ways and Means before it can pass.

Congress could pass the budget, but it may not agree with the president's priorities.

What government action occurred due to the Savings and Loan Crisis? Congress passed legislation transferring insurance coverage for S&Ls to the FDIC. Congress passed legislation restricting S&Ls from providing home loans. Congress passed legislation forbidding S&Ls to accept deposits greater than $100,000. Congress passed legislation supporting the deregulation of S&Ls.

Congress passed legislation transferring insurance coverage for S&Ls to the FDIC.

Which is an argument against implementing a value-added tax (VAT)? It places an unfair burden on people with lower incomes. It places an unfair burden on large corporations. It places an unfair burden on people with higher incomes. It places an unfair burden on small businesses.

It places an unfair burden on people with lower incomes.

Some states collect a sin tax on products like alcohol and tobacco. What outcome would a state expect when levying a sin tax? It would expect a decrease in demand. It would expect a decrease in supply. It would expect an increase in demand. It would expect an increase in supply.

It would expect a decrease in demand.

How would a balanced budget amendment proposed by Congress impact deficit spending? It would nearly eliminate it because the federal government would be required to balance the budget. It could cause it to increase if the state governments took extreme measures to balance their budgets. It would nearly eliminate it because the state governments would be required to balance their budgets. It could cause it to increase if the federal government took extreme measures to balance the budget.

It would nearly eliminate it because the federal government would be required to balance the budget.

What is an argument against the benefit taxation principle? People who earn less money simply cannot afford to pay for some benefits. It unfairly taxes people who do not take advantage of a benefit. Corporations would hire fewer workers because of the heavy burden. The regressive structure places a heavier burden on the wealthy.

People who earn less money simply cannot afford to pay for some benefits.

How does the circular flow of the financial system work? Savers deposit funds into financial intermediaries, who then lend a portion to borrowers. Borrowers deposit funds into financial intermediaries, who then lend a portion to savers. The government deposits funds into financial intermediaries, who then lend a portion to regional banks. Corporations deposit funds into financial intermediaries, who then lend a portion to Federal Reserve banks.

Savers deposit funds into financial intermediaries, who then lend a portion to borrowers.

Which are examples of expenditures that qualify as transfer payments? (Select all that apply.) Social Security checks missile defense systems tuition and other fees grants-in-aid

Social Security checks missile defense systems PARTIAL

In what way could tax policy be used to slow a rapidly growing economy? Taxes could be raised to decrease the money in circulation. Taxes could be lowered to decrease the money in circulation. Taxes could be raised to increase the money in circulation. Taxes could be lowered to increase the money in circulation.

Taxes could be raised to decrease the money in circulation.

For three years in a row, the federal government's expenditures exceeded its revenue. As a result, the federal debt grew by $4 billion, and the interest payment on the federal debt increased substantially. Which are true about the scenario? (Select all that apply.) The federal government's increase in debt led to an increase in interest payments. The federal government's deficit spending led to an increase in the federal debt. The federal government's interest payments toward its deficit totaled $4 billion. The federal government's yearly deficit spending totaled $4 billion.

The federal government's increase in debt led to an increase in interest payments. The federal government's deficit spending led to an increase in the federal debt.

What were results of the Savings and Loan Crisis? (Select all that apply.) The final cost to taxpayers who had to cover the deposit insurance was more than $100 billion. The Federal Deposit Insurance Corporation (FDIC) replaced the Federal Savings and Loan Insurance Corporation (FSLIC). People moved their deposits from savings and loan institutions to banks. Many large commercial banks failed as they were absorbed by savings and loan institutions.

The final cost to taxpayers who had to cover the deposit insurance was more than $100 billion. The Federal Deposit Insurance Corporation (FDIC) replaced the Federal Savings and Loan Insurance Corporation (FSLIC). People moved their deposits from savings and loan institutions to banks.

What are examples of discretionary government spending? (Select all that apply.) The government allocates discretionary spending for national defense. The government allocates discretionary spending for space programs. The government allocates discretionary spending for national parks. The government allocates discretionary spending for veteran benefits.

The government allocates discretionary spending for national defense. The government allocates discretionary spending for space programs. The government allocates discretionary spending for national parks.

What are examples of mandatory government spending? (Select all that apply.) The government is required by law to fund Social Security. The government is required by law to fund veteran benefits. The government is required by law to fund Medicare. The government is required by law to fund NASA.

The government is required by law to fund Social Security. The government is required by law to fund veteran benefits. The government is required by law to fund Medicare.

What are the primary opposing viewpoints concerning social welfare? (Select all that apply.) The government or society should provide social welfare. Individuals and private groups should assist those in need; there is no place for the government. Social welfare should be generated from local councils elected by homeowners. Assistance should be provided through foreign aid. SUBMIT FOR GRADING

The government or society should provide social welfare. Individuals and private groups should assist those in need; there is no place for the government.

How do unfunded mandates impact state spending? The mandates force states to spend money in ways they did not anticipate. The mandates do not have an impact because states can choose not to implement them. The mandates decrease spending by requiring states to balance their budgets. The mandates increase spending by providing grants of funds to states for programs.

The mandates force states to spend money in ways they did not anticipate.

How does the national debt impact private investors? (Select all that apply.) The national debt causes a crowding-out effect and increases interest rates for private borrowers. The national debt requires the government to increase revenue streams and potentially increase taxes. The national debt requires the government to print more currency, which reduces inflation and the purchasing power of private investors. The national debt causes deflation and decreases interest rates for private borrowers.

The national debt causes a crowding-out effect and increases interest rates for private borrowers. The national debt requires the government to increase revenue streams and potentially increase taxes.

ill makes $100,000 per year, and Kelly makes $40,000 per year. Under a flat tax, what would be true? The women would pay the same percentage. The women would pay the same total amount. Kelly would pay a higher total amount. Jill would pay a higher percentage.

The women would pay the same percentage.

How are payroll taxes used? They are used for entitlement programs like Social Security. They are used for energy and environmental programs. They are used for federal education programs. They are used for worker safety programs like the Occupational Safety and Health Administration.

They are used for entitlement programs like Social Security.

Anna says the tax system needs to be simplified. She says it takes the average US taxpayer approximately 14 hours to complete and file federal taxes. If Anna is correct, which tax would simplify the tax system and maintain equity and efficiency? a flat tax that does not include deductions a value-added tax that permits itemized deductions a progressive tax that permits itemized deductions a regressive tax that includes a standard deduction

a flat tax that does not include deductions

The federal government operates military bases in many states. Luke Air Force Base is located in Glendale, Arizona, but the federal government is considering moving the base to New Mexico. What problem will Glendale face if Luke Air Force Base is closed? a loss of revenue an expense for moving the base an expense for creating a new base a loss of protection

a loss of revenue

What is the definition of a stock? a security sold by a corporation in exchange for shares of ownership in the company a contract in which an investor loans money to a corporation and earns interest on a fixed schedule a part of a company's profits that are shared with its employees through bonuses a pooling of investors and their funds to purchase a range of financial assets

a security sold by a corporation in exchange for shares of ownership in the company

What is a proportional tax? a tax in which the percentage a person pays in taxes stays the same regardless of income a tax in which the percentage a person pays in taxes decreases, but the total dollars increase as income increases a tax in which the percentage a person pays in taxes decreases as income decreases a tax in which the percentage a person pays in taxes increases along with income

a tax in which the percentage a person pays in taxes stays the same regardless of income

What is a progressive income tax? a tax in which the tax rate increases as a person's income increases a tax in which the rate does not change, regardless of a person's income a tax in which the rate remains flat, regardless of a person's income a tax in which the rate decreases as a person's income increases

a tax in which the tax rate increases as a person's income increases

What was the Gold Standard Act? legislation passed in 1900 that established gold as the only standard for redeeming paper money legislation passed in 1972 by President Nixon that officially ended the ability to convert US dollars to gold legislation passed in 1791 by Alexander Hamilton that established the First Bank of the United States legislation passed in 1861 by the Confederate Army to establish its own banking system

legislation passed in 1900 that established gold as the only standard for redeeming paper money

What are the largest categories of discretionary and mandatory spending? national defense and Social Security interest on debt and welfare education and transportation unemployment compensation

national defense and Social Security

Why is it important that money stores its value? (Select all that apply.) so that sellers will accept it as payment so that sellers know the money will last so that buyers know what their money will buy so that buyers know it is genuine

so that sellers will accept it as payment so that sellers know the money will last PARTIAL

What is pork barrel spending? (Select all that apply.) spending that benefits a specific congressperson's district spending that may be hidden in a bill spending that cannot be cut spending that cannot be used for public works

spending that benefits a specific congressperson's district spending that may be hidden in a bill

If Jim hides $30 under his mattress and he still has $30 there three weeks later, what function has the money fulfilled? store of value unit of account medium of exchange transferability

store of value

What is fiscal policy? the government affecting the economy through tax policies and federal spending politicians providing tax breaks for large corporations in exchange for campaign contributions the Supreme Court ruling on tax policies passed by Congress but vetoed by the president the House of Representatives passing new tax laws without consent from the Senate

the government affecting the economy through tax policies and federal spending

What is the purpose of an expansionary fiscal policy? to increase the level of aggregate demand to grow the economy to decrease the level of aggregate demand to slow rising inflation to decrease the level of federal spending to lower the nation's gross domestic product to increase the level of federal spending to increase the nation's credit score

to increase the level of aggregate demand to grow the economy

What types of banking transactions can be performed through a mobile app? (Select all that apply.) transfer money between savings and checking accounts receive automatic payments from an employer set up automatic bill pay transfer funds from a 401(k) to a credit card

transfer money between savings and checking accounts receive automatic payments from an employer set up automatic bill pay

What is the purpose of the Internal Revenue Service? It collects income taxes for the federal government. It provides deposit insurance for banking customers. It conducts the nation's monetary policy, such as setting interest rates. It manufactures and prints the nation's money supply.

It collects income taxes for the federal government.

Which is a way the United States' federal debt impacts its economy? It has a negative impact because the federal government has to make large interest payments on that debt. It has a positive impact because it leads to a higher valuation on the US dollar. It has a negative impact because it leads states to increase their spending, which leads to more debt. It has a positive impact because it forces the government to reduce its spending.

It has a negative impact because the federal government has to make large interest payments on that debt.

Which is a feature of a flat tax? It is not progressive and remains the same for all consumers. It is regressive and increases for consumers with lower incomes. It provides greater tax deductions for consumers. It is more complicated than other tax systems.

It is not progressive and remains the same for all consumers.

What is the definition of return? the profit or loss accumulated from an investment the percentage of loss from a short-term investment the liquidity, or lack of liquidity, for an investment the net profit of an investment when adjusted for inflation

the profit or loss accumulated from an investment

Once the federal budget is set, how is money allocated? through the appropriations committees through mandatory spending through the executive branch through discretionary spending

through the appropriations committees

What is the primary role of a financial intermediary? to channel funds between savers and borrowers to channel funds between foreign governments to trade stocks on the New York Stock Exchange to provide tax preparation services for corporations

to channel funds between savers and borrowers

The US government issued greenbacks during the Civil War. What were greenbacks? paper money printed with green ink on the reverse side copper coins that turned green through wear and tear bonds using green paper to help support the war effort gold coins only issued through state banks

paper money printed with green ink on the reverse side

What is one way credit unions differ from commercial banks? Credit unions do not exist to make a profit. Credit unions do not have members. Credit unions do not make real estate loans. Credit unions do not offer a variety of loans.

Credit unions do not exist to make a profit.

Which social welfare government acts and programs were enacted as a result of the Great Depression? (Select all that apply.) Emergency Banking Act Federal Deposit Insurance Corporation (FDIC) No Child Left Behind Patient Protection and Affordable Care Act

Emergency Banking Act Federal Deposit Insurance Corporation (FDIC)

What impact can taxes have on the economy? Higher taxes reduce demand because consumers have less money to spend. Lower taxes reduce trade because the government has fewer funds to invest on roads. Lower taxes increase unemployment because the government cannot hire as many workers. Higher taxes reduce supply because the government has more money to invest in goods and services.

Higher taxes reduce demand because consumers have less money to spend.

Which explains why cutting the federal budget is difficult? Only discretionary spending can be cut, and it is a smaller portion of the budget. Discretionary spending has become a portion of the budget, so it is difficult to cut. Only mandatory spending is renewed every year, and it cannot be cut. Mandatory spending impacts more people, which makes it difficult to cut.

Only discretionary spending can be cut, and it is a smaller portion of the budget.

Which act enacted by President Barack Obama includes expanded access to private and public health insurance for citizens, yet continues to be a point of contention both politically and socially? Patient Protection and Affordable Care Act Personal Responsibility and Work Opportunity Act Economic Opportunity Act Family and Medical Leave Act

Patient Protection and Affordable Care Act

What are examples of federal mandatory spending? (Select all that apply.) Social Security Medicare education transportation

Social Security Medicare education PARTIAL

What is best defined as a "contract in which an individual loans money to a corporation and earns interest on a fixed schedule in return"? bond mutual fund stock certificate of deposit

bond

Which financial institutions typically have membership requirements, such as belonging to the military? credit unions commercial banks central banks savings and loans

credit unions

Which type of money derives its value from government decree, and not from gold or silver? fiat money representative money commodity money commercial money

fiat money

Which items are primary areas of assistance for social welfare? food, housing, and medical care auto insurance, homeowner's insurance, and life insurance urban safety, transportation, and tuition assistance water, gas, and electrical utilities

food, housing, and medical care

What is a significant health care expense spent by state governments? funding Medicaid programs funding the National Institutes of Health funding the Centers for Disease Control and Prevention funding the Federal Employees Health Benefits Program

funding Medicaid programs

Which is an example of bartering? (Select all that apply.) giving golf clubs to a friend for an MP3 player sweeping floors at a movie theater to see films for free having a garage sale at home to raise money dropping off used goods to a charity for them to sell

giving golf clubs to a friend for an MP3 player sweeping floors at a movie theater to see films for free

What type of government expenditure is defense spending? goods and services income per capita transfer payment

goods and services

What are examples of discretionary federal spending that can face budget cuts? (Select all that apply.) military education Medicare Social Security

military education

What type of spending includes line items on a federal budget that have bypassed normal processes and are used to benefit a small group of people or businesses? pork barrel spending subsidies spending nondiscretionary spending deficit spending

pork barrel spending