Economics Chapter 10

Stability

a stable government will result in a stable and successful economy

Ponzi Scheme

dishonest investments looking for easy money (Charles Ponzi)

Socialism

economic system based on collective ownership and control of national resources

Excessive Taxation

Less money available for businesses and households

Inflation and Debasement of Money

leads to increase in prices and higher interest rates for loans

Excessive Regulation

too much regulation discourages current and future business owners from succeeding

Direct Tax

paid directly to the government (example Property/Income)

Indirect Taxes

taxes for which the responsibility for payment can be passed on to someone else

Progressive Tax System

wealthy pay taxes at a higher tax rate than lower income people

Flat Tax

everyone pays the same percentage of taxes regardless of income earned

Regressive Tax

people with a low income pay the highest percentage of taxes while the rich pay a smaller percentage but an equal amount

FICA Tax

funds Social Security and Medicare programs

Original

the government would stay in everything that is public

Current

the government is involved in the public and private sector

Deficit Spending

spending more each year than is brought in through revenue

National Debt

total amount owed

New Deal

created by FDR during the Great Depression

Keynesianism

the government should “prime the economic pump” and put money into the economy