Exploring Economics Units 11-15
the official definition of a recession by the NBER is
"a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales"
the Congressional Budget Office has the responsibility of providing
"independent analyses of budgetary and economic issues to support the Congressional budget process"
the free market does not provide some goods and services for two reasons:
(1) because private companies cannot make a profit or (2) because it would be inefficient or unreliable for a private company to do so
EBT stands for
Electronic Benefit Transfer
SNAP stands for
Supplemental Nutrition Assistance Program
an amortization table is
a chart showing the relative amounts of principal and interest in each payment over the life of the loan
a derivative is
a financial instrument whose value is determined by or derived from an underlying asset
the term regressive tax means that
a higher percentage of income is paid in taxes at lower income levels
a credit default swap is
a kind of insurance arrangement in which a bank or investment company that holds a debt makes a payment like a premium to an insurance company, for which the insurance company assumes the risk if the debt goes bad
regulations are
a limitation on the free market
historically, the most common kind of mortgage has been
a loan for thirty years at a fixed rate of interest
a mortgage
a loan to purchase a home
a subprime mortgage is
a mortgage given to a borrower who is not a prime candidate for a mortgage
a depression is generally understood to be
a period of economic downturn that is more severe than a recession
the Renewable Fuel Mandate is
a requirement by Congress that oil refiners include ethanol in an increasing percentage of the gasoline they produce
the result of the Smoot-Hawley Tariff was
a sharp drop in trade with other countries
the Social Security Administration calculates retirement benefits on the basis of
a worker's income during his years of work
the healthy average rate of growth for a nation's GDP is
about 3 percent
a taxpayer determines his gross income by
adding up all taxable income from wages, salaries, self-employment income, taxable investment income, and so forth
the Strategic Petroleum Reserve is
an emergency supply of oil that the United States government has maintained in underground storage facilities along the Gulf of Mexico since 1975
the consumer price index (CPI) is
an estimate of what a typical urban consumer has to pay for a sampling of typical goods and services
example of itemized deductions
charitable contributions, medical expenses that exceed a certain percentage of taxable income, property and sales taxes paid, and interest paid on a home mortgage
America's largest crop is
corn
economic growth lessens poverty by
creating new opportunities for employment and for entrepreneurs to make profits
cost-benefit analysis is about
deciding if the cost of doing something is worth making the choice
the United States Trade Representative is responsible for
developing trade and for conducting trade negotiations with other countries
economists calculate per capita by
dividing a country's GDP by its population
the Council of Economic Advisors advises the president on
domestic and international economic policy
when a market failure occurs, a government might
enact an environmental policy that involves taxing or charging fines to polluters, requiring companies to clean up toxic waste dumps, and requiring companies to pay the expenses for reducing their level of pollution
the Affordable Care Act of 2010 requires
every American (with a few exceptions) to have health insurance coverage or face the disincentive of having to pay a penalty
the Department of the Treasury is the Cabinet department that is most involved with
federal economic policy
the Temporary Assistance for Needy Families program has a
five-year limit on cash assistance and recipients must be actively searching for employment
economic freedom
freedom to work, buy, save, and engage in all other economic activity without any hindrance, regulation, or oversight by the government
discretionary spending is
funding for non-entitlement programs
since World War II, the periods between economic troughs have
generally gotten longer
about one-fourth of the federal budget goes to
health care
one-sixth of the U.S. gross domestic product is devoted to
health care
the Federal Registrar contains
hundreds of thousands of pages of standards, guidelines, and rules that have the power of law in areas such as worker safety, product labeling, food handling, drug warnings, and advertising
the Federal Housing Authority encourages and assists home ownership by
insuring some mortgage that private banks make to homeowners
mortgage-backed securities refers to
investment instruments containing a bundle of mortgage loans
the average length of a recession since World War II is
just over eleven months
unemployment is a lagging indicator because
layoffs generally occur after sales have started to decline
the purpose of the Americans with Disabilities Act was
more equal physical access for all
when market failure occurs, a rare response is to
nationalize an industry
the real GDP expresses
output in terms of a comparison with the prices of goods and services in the previous year
when corn-based ethanol did not prove to be an economically feasible energy alternative to petroleum, the federal government began
paying subsidies to farmers and producers for its production
regulations generally affect prices because
producers pass the cost of complying with them on to consumers
output/inputs and output/hours worked are used to express
productivity
the key issue for determining wealth and poverty is
productivity
GDP/aggregate hours worked expresses
productivity for an economy as a whole
the gross domestic product consists of
purchases by consumers, purchases of capital goods by businesses, purchases of goods and services by government, and net exports (total exports minus total imports)
commercial paper are
short-term loans companies obtain to make their payroll
a taxpayer determines his taxable income by
subtracting all exemptions and deductions from his or her gross income
futures investors try to make money by
taking risks on what stock and commodity prices will be in the future
the Internal Revenue Service enforces the
tax code, and it has considerable authority to formulate specific tax regulations
government funds the building of roads and bridges with
tax revenue
Congress participates in fiscal policy by enacting laws related to
taxing, spending, and regulations
a comparison of nominal GDP to real GDP produces a statistic called
the GDP deflator
the Conference Board publishes
the Leading Economic Index, also known as the Index of Leading Economic Indicators
NASDAQ is
the National Association of Securities Dealers Automated Quotations. it is an electronic stock market
the NBER is
the National Bureau of Economic Research
OPEC is
the Organization of Petroleum Exporting Countries
the national debt
the accumulated annual deficits of the United States
the nominal GDP is
the actual total figure of the value of the nation's output in terms of current prices
a deficit is
the amount that the government spends each year which exceeds revenue that it receives
the Office of Management and Budget heads
the development of the federal budget and sees that the executive departments follow through on budget guidelines
purchasing power parity (PPP) takes into account
the differences in the cost of living in various countries by using the long-term exchange rate between currencies to arrive at a common currency of expression
Medicare provides medical coverage for
the elderly
the executive branch participates in fiscal policy through
the executing of laws, through regulatory activities, and through implementing policy goals
Congress had lowered income tax rates during the 1920s because
the federal government had begun running a surplus
the economic boom of the late 1990s was called
the high-tech bubble
the New York Stock Exchange (NYSE) is
the largest actual stock market in the world
disposable personal income (DPI) is
the money that households have available for discretionary spending after taxes
the term progressive tax means that
the percentage of taxes to be paid increases as income rises
Medicaid provides medical coverage for
the poor
the purpose of regulations is
the public welfare
the top marginal income tax rate is
the rate paid by people with the highest income
the Dow Jones Industrial Average takes
the stock values of thirty key companies out of the thousand that are traded and uses a formula to determine a cumulative value for those stocks
moral hazard is
the tendency of people to engage in riskier behavior if other people bear or share the cost of that behavior
a foreclosure is
the term for a bank taking over a home that has a mortgage
wealth is
the total value of a person's assets, which often includes a house and property, investments, bank accounts, and other useful goods, acquired over several years
the Roosevelt Administration tried to decrease production becuase
they believed that too much competition had led to overproduction
inputs involve such factors as
time, the number of people employed, and resources used
the original purpose of Medicare was
to cover physician visits and hospitalization for Americans age 65 and older
the goals of the fiscal and monetary policies of the federal government are
to promote economic growth while avoiding significant upswings and downturns, to reduce inflation and unemployment, to encourage international trade, and to provide equal access to a fair and free market
the original purpose of Social Security was
to provide retirement benefits for workers and survivor benefits to families of deceased workers
the purpose of insurance is
to share the risk of expense
income is
what a person earns during a certain period
the traditional definition of a recession is
when the gross domestic product has declined for at least two consecutive quarters or six months
producer price index (PPI) reflects
wholesale prices that producers charge to retail establishments