Federal Reserve Vocab

Decreases

If the Federal Reserve (blanks) interest rates, then more people will be able to afford to buy houses.

Gross Domestic Product

The total value of all goods and services produced in a country in a year. (GDP)

Interest

The cost borrowers incur and must repay in order to borrow money.

Monopoly

A firm that is the only source for a service or product (thus there is no competition).

Interest Rates

The Federal Reserve sets key (blank blanks)- thus influencing the money supply, inflation, and growth.

Fiscal Policy

The government’s ability to tax and spend

Social Insurance

Types of taxes that finance social welfare programs such as Social Security, Medicare, and unemployment.

Deflation

A general decrease in prices

Increases

If the Federal Reserve (blanks) interest rates, then inflation is reduced but people pay more for loans.

Progressive

A type of tax that sets a higher rate for wealthier people. The higher the income, then the higher the tax rate.

Federal Reserve

Part of the executive branch, it acts as the central banking system and regulates monetary policy to promote economic growth, employment, and stability.

Regressive

Taxes that are set at a fixed rate without regard to income.

Inflation

A general increase in prices.

Exempt

Churches and charities are generally tax (blank). This means they do not have to pay taxes by law.

Sixteenth

The amendment that gave us an income tax.

Monetary Policy

The responsibility of the Federal Reserve, it refers to the amount of currency in circulation and the availability of credit in the economy.

Slow

Raising taxes, interest rates, and decreasing spending all will likely (blank) the economy.

Taxes

Ben Franklin said, “In this world nothing can be said to be certain, except death and (blank)” They fund the government.

Recession

An absence of growth and the economy shrinks.