US GOV TEST - CHAPTER 16

fiscal policy

a government's various means it uses to raise and spend money and thereby influence the nation's economy

progressive tax

what kind of tax increases in accordance to a persons income? (the higher the income, the higher the tax rate)

regressive tax

what kind of tax is based on a fixed rate without regard to a taxpayer's income?

interest

what is the price one pays to borrow money called?

deficit

what is it called when the government spends more than it earns?

surplus

what is it called when a government earns more than it spends?

Keynes

what english economist proposed the idea that the government should borrow and spend more to improve the economy? (last name only)

demand

when economists say more spending and borrowing is required to improve the economy, this is called __?__ side economics

supply

when economists say lower taxes instead of greater spending is needed to improve the economy, this is called __?__ side economics

dont interpret

what is the first step to interpreting something?

what do i see

what is the second step to interpreting something?

whats happening

what is the third step to interpreting something?

look at the words and define them

what is the fourth step to interpreting something?

what do the words have to do with what you see and whats going on

what is the fifth step to interpreting something?

interpret it

what is the sixth step to interpreting something?

purchasing power parity

what does PPP stand for?

please as many people as you can, displease no one

what is the first rule of politics

power

what is the one word definition of politics?

old age, survivor, disability insurance

what does OASDI stand for?

entitlements

benefits that federal law says MUST be payed to all those who meet eligibility requirements

gross domestic product

what does GDP stand for?

inflation

what is it called when prices increase, and the value of money goes down?

deflation

what is it called when prices decrease, and the value of money increases?

recession

when there is an absence of growth and the economy shrinks, it is called a:

monetary policy

what policy involves the money supply and the availability of credit in the economy?

open market operations

the process that involves the buying or selling of government securities (bonds) from the nation's banks

discount

the __?__ rate is the rate of interest a bank must pay when it borrows money from a federal reserve bank

50k

what is the MEDIAN yearly salary in the U.S.

1.90

what is the WORLD'S poverty line in $ a day?

90k

what is the AVERAGE salary in the US?

economics

a study simply defined as: where you learn how to maximise scarce resources

10k

what is the MEDIAN salary in the WORLD (PPP)

OASDI

what is the LARGEST expense of the federal government?

23

what percent does OASDI take from the FEDERAL budget? (think: how many cents of the dollar?)

1) pay back debt/borrow more

2)print money/open market operations to shrink money supply

3)raise tax/cut tax

4)raise spending/lower spending

5)raise intrest rate/lower intrest rate

LIST all 5 OPTIONS the government has to tackle the debt

C+G+I+(X-M)

fill in the GDP equation: GDP = ...

abel, baker, and charlie

who are the three original characters from the fish book?

capital

what is the term for something created not for its own sake, but to make something else/earn money (ex: the net from the fish book)

FED

nickname for the US federal reserve bank

24 trillion

what is the current estimated US GDP?

30 trillion

what is the current estimated US national debt?

335 million

what is the us population?

7.9 billion

current world population

federal individual income tax

from what tax does the federal government earn MOST of its revenue?

48

what percent does the US government earn from the federal individual income tax? (think: how many cents of the dollar?)

reserve requirement

what is the name for the amout of money that the federal reserve board determines banks must keep "in reserve"

full employment
price stability
economic growth

what are the three main goals the Federal Government seeks to achieve in the economic realm? (according to chapter 16.4)

discretionary spending

a term also known as controllable spending; describes spending on specific budget items that congress and the president can control

mandatory spending

a term also known as uncontrollable spending; describes budget items that congress cannot control the amount spent because of laws and entitlements

public debt

term for the total outstanding indebtedness of the federal government

payroll tax

a tax applied to a percent of a persons salary, matched by their employer

excise tax

tax laid on the manufacture, sale, or consumption of goods and/or the preformance of services

estate tax

levy imposed on the assets of someone who dies (ex: ryan inheriting mr fredericks car AFTER he dies)

gift tax

tax imposed on a gift from one living person to another (ex: mr frederiks giving ryan his car BEFORE he dies)

customs duty

taxes on goods IMPORTED to the united states from abroad

net

what capital does able create to catch more fish?

underconsumption

when one chooses to consume less in order to potentially consume more in the future (think: able did not eat fish for a day to make his net)

skim
question
read
recite
review

what does SQ3R stand for? list each step

principal

the original amount in an investment, or the original amount of money before intrest is called what?

fiat

__?__ currency is money that has no intrinsic value, and cannot be redeemed for precious metals (on its own it has no value; ex: paper money)

12

how many federal reserve (district) banks are there?

minting

__?__ is the process of making coins

medicare

health care intended for the ELDERLY

medicaid

health care for the POOR

70

what percent of the federal budget (think: the dollar) is spent on entitlements?

entitlements
intrest payments on national debt
big ticket items

LIST the three examples of uncontrollable/mandatory spending in the US budget?

expenditures

term for the money going OUT of the federal government

revenue

term for the money EARNED by the federal government

federal insurance contribution act

what does FICA stand for?

federal unemployment tax act

what does FUTA stand for?

35

combined, what percent does FUTA and FICA add to the us revenue? (think: how many cents of the dollar?)

consumption

in the GDP equation, 70% (variable C), stands for what? (this explains what 70% of the GDP is used on)

government

in the GDP equation, 20% (variable G) stands for what? (this explains what 20% of the GDP is used on)

28

what percent of the us budget is spent on medicare and medicaid COMBINED (think: how many cents of the dollar?)

credit

term for capital that is loaned out/borrowed

investment

term for risking savings to possibly produce more later

savings

term for an unused fund of money; underconsumption that is not used

the power to make things the way you want them to be

what is the LONG definiton of politics

brainwashing

getting someone to think something, without letting them think about it

THINK

what was the focus from the first day of class?