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)
