Civics Final Exam

Defense Spending                

money spent by government for defense

Medicare

health insurance program for people age 65 or older and younger people with disabilities

Mandatory Spending Items

includes entitlement programs such as social security, medicare, medicaid, must be funded each year

Medicaid

joint federal and state program that gives health coverage to some people with limited income and resources

The Federal Budget

a comprehensive accounting of the government's spending, revenues, and borrowing

Progressive Tax

personal income taxes are an example; greater impact on individuals that make more money, the more you make the more they take

Deficit

when budgetary expenditures exceed budgetary revenues

Regressive Tax

sales tax are an example of this tax; have a greater economic impact on individuals that make less money

Discretionary Spending Items

spending on environmental protection, education, highway construction, food safety inspections, where most cuts occur in a budget shortage

Personal Income Taxes

single largest source of annual federal revenue

Surplus

when budgetary revenues exceed budgetary expenditures

Social Security

any government system that provides monetary assistance to people with an inadequate or no income

The National Debt

total amount of money that is owed by the U.S

FICA

U.S. federal payroll tax

Excise Taxes

tax on gas or alcohol

Proportional Tax

another name for payroll tax that funds social security and medicare

Frictional unelmployment

OCURS WHEN SOMEONE VOLUNTARILY LEAVES ONE JOB TO FIND ANOTHER JOB

Structural unemployment

SKILLS THAT WORKERS HAVE ARE NO LONGER NEEDED OR NO LONGER MATCH UP WITH THE JOBS AVAILABLE, EXAMPLE: MANUAL JOBS REPLACED WITH TECHNICAL JOBS

Economic indicators

a piece of economic data, usually of macroeconomic scale, that is used by analysts to interpret current or future investment possibilities

Underemployment

a measure of employment and labor utilization in the economy that looks at how well the labor force is being used in terms of skills, experience, and availability to work

Gross Domestic Product

the standard measure of the value added created through the production of goods and services in a country during a certain period.

Economic Cycle

economic fluctuations between periods of expansion and contraction

Cost-Push

occurs when overall prices increase due to increases in the cost of wages and raw materials

Discouraged worker

someone who has given up looking for work and has left the labor market

seasonal unemployment

OCCURS WHEN PEOPLES JOBS ARE BASED ON A PARTICULAR TIME OF YEAR AND ARE UNEMPLOYED DURING OTHER PARTS OF THE YEAR, EXAMPLE: SNOWBALL STANDS, HOLIDAY WORKERS

inflation

a long-term increase in the general level of prices

consumer price index

an index of the variation in prices paid by typical consumers for retail goods and other items

cyclical unemployment

OCCURS WHEN THERE IS A DOWNTURN IN THE ECONOMY, A DOWNTURN IN THE BUSINESS CYCLE, MOST SERIOUS TYPE, CAN INDICATE A RECESSION

demand-pull

arises when the total demand for goods and services (i.e. 'aggregate demand') increases to exceed the supply of goods and services (i.e. 'aggregate supply') that can be sustainably produced

per-capita GDP

Gross Domestic Product on a per-person basis; GDP divided by population

1. What is economics?

the study of how individuals and nations make choices about ways to use scarce resources to fulfill their needs and wants

2. What is a need?

something necessary for survival

3. What is a want

something not necessary for survival

4. What economic system is the US and which system most heavily influences the US?

mixed market; influences by market economic principles

5. What are the 3 factors of production?

land, labor and capital

6. How do supply and demand work together in markets?

Supply is generally considered to slope upward: as the price rises, suppliers are willing to produce more. Demand is generally considered to slope downward: at higher prices, consumers buy less.

7. What are the 3 basic economic questions?

What goods and services will be produced, How will they be produced, and Who will consume or use them?

8. What is a Market economic system?

a type of economic system where supply and demand regulate the economy, rather than government intervention

9. What is Command economic system?

Type of economic systems that answers the 3 basic ?'s through government planning

10.  What is a traditional economic system?

Type of economic system that answers the 3 basic ?'s through habit and custom

11.  What MOST influences the quantity of product supplied?

the selling price of the product

12.  What is mandatory spending? Examples…

social security

13.  What is discretionary spending? Examples….

environmental protection

14.  What level of government is responsible for fire protection?

local

15.  What type of taxes are personal income taxes classified as?

progressive tax

16.  What type of taxes are sales tax classified as?

regressive tax

17.  What makes up the 12-month Government fiscal year?

oct 1- sept. 30

18.  What is the difference between Medicare and Medicaid?

Medicare is federal health insurance for anyone age 65 and older, and some people under 65 with certain disabilities or conditions. Medicaid is a joint federal and state program that gives health coverage to some people with limited income and resources

19.  What is the advantage of automatic stabilizers?

do not require additional government action to take effect

20.  What is the process to make a Federal budget?

president sends congress a budget message, house and senate pass budget resolutions, house and senate pass bills authorizing spending

21.  What is the greatest source of State revenue?

intergovernmental revenue

22.  What is the definition of Fiscal Policy?

how the government uses taxes and spending to reach economic goals

23.  Who makes the decision in fiscal policy?

both the executive and legislative branches

24.  What is the purpose of the FDIC?

insure depositors up to $250,000

25.  Why is the Federal reserve board independent of the President and Congress?

so it can make decisions without political pressure

26.  Money is anything people are willing to ____________ according to economists.

accept in exchange for goods

27.  How is money like a measuring stick?

It can be used to assign value to a good or service

28.  Who is the current Federal reserve chair?

Jerome Powell

29.  Where do most people use for their checking and savings account?

commercial banks

30.  What is the interest rate?

Cost of borrowing money

31.  What did the Banking Act of 1933 do?

effectively separated commercial banking from investment banking and created the Federal Deposit Insurance Corporation