5 Written questions
5 Matching questions
- Average Tax Rate
- Cost of Living Adjustments
- Balanced Budget
- GDP Gap
- a total tax paid divided by total (taxable) income, as a percentage
- b An automatic increase in the wages of workers or payments received to adjust for the impact of inflation
- c profits distributed to stockholders on a per-share basis
- d measures loss in output due to cyclical unemployment
- e a situation in which the government's spending is exactly equal to the total taxes and other revenues it collects during a given period of time
5 Multiple choice questions
- Budget philosophy calling for budget deficits during recessions to be financed by budget surpluses during expansions
- A decline in the economy's total output lasting at least two consecutive quarters or 6 months (An economic Contraction)
- a tax corporation pays on its profits. Third largest contributer of government revenue.
- The incorrect assumption that one event causes another because the two events tend to occur together.
- A decrease in government purchases, increase in net taxes, or some combination of the two aimed at reducing aggregate demand enough to return the economy to potential output without worsening inflation
5 True/False questions
Proportional Tax → A legal entity whose liability is limited to the value of their stock
Money Multiplier → The multiple at which the money supply increases as a result in an increase in fresh reserves in the banking system
Social Security System → The interest rate that banks pay to the Fed when banks need to borrow from the Fed. This is known as a penalty for violating the required reserve ratio
Fiscal Drag → When taxes increase, welfare and unemployment compensation decrease in response to an economic expansion. This lessens the increase in disposable income
Wealth of Nations → This is the 18th century book written by Scottish economist Adam Smith in which he spells out the first modern account of free market economies.