fiscal & monetary policy
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23 Terms
involve increasing government spending and/or lowering taxes in order to “expand” the amount of $ in the economy. Expanding the size of the economy in short.
expansionary policies
involve decreasing government spending and/or increasing taxes in order to “contract”/shrink the amount of $ in the economy. Contracting the size of the economy in short.
contractionary policies
use of tax policy and spending policy in order to impact the economy.
fiscal policy
can be used to expand or contract the economy.
monetary policy
higher earners pay higher rates.
progressive tax
lower earners pay lower rates.
regressive tax
same tax rates to all.
flat tax
an increase in the money supply, and as a result, a decrease in the value of money.
inflation
public ownership, government dependency, equality, high taxes.
what are some principles of communism?
nationalism, price fixing
what are some principles of communism in a government controlled market?
private ownership, personal dependency, inequality, low taxes
what are some principles of capitalism?
law of demand, law of supply.
what are some principles of capitalism in a free market?
demand increases, prices increase
what is the law of demand?
supply increases, prices increase
what is the law of supply?
prices go up.
what do prices do when demand goes up?
prices go down.
what do prices do when demand goes down?
prices go down
what do prices do when supply goes up?
prices go up
what do prices do when supply goes down?
flat tax
progress tax
regressive tax
what are three types of taxes?
IOUs delivered to people willing to lend the government their money
what is the definition of US securities being sold?
less money in people’s hands = lower money supply
what is the impact on the economy if the number of US securities goes up
more money in people’s hands = goes down
what is the impact on the economy if the number of US securities goes down?
the percentage of interest to charge
what is the definition of discount rate?