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Macroeconomics pt.2 EOCT Domain Review
Terms in this set (15)
Entitlement programs like Social Security fall into what category?
Mandatory Spending Programs.
What role does the Federal Reserve play in regulating the banking system?
The Federal Reserve coordinates all regulatory activities and examines banks periodically.
Why does the Federal Reserve alter Monetary Policy?
To lessen the effects of the natural business cycle.
Which situation is most likely to cause the Federal Reserve to introduce a tight money supply?
The economy expands quickly and inflation is a concern.
How many Federal Reserve Districts are there?
The Federal budget is put together by:
Congress and The White House.
What is the relationship between interest rates and the demand for money?
As interest rates decrease, the demand for money increases.
When you buy a U.S. savings bond, you...
Loan money to the government.
What happens to the money your employer withholds from your paycheck?
Your employer sends it to the Federal Government to help pay your income taxes.
When revenues exceed expenditures...
There is a budget surplus.
Your department store receipt says you pay 5% sales tax on sports equipment. What is this tax?
A Regressive Tax, because that 5% comes from your income.
What is entitlement?
A social welfare program providing benefits to people who need certain eligibility requirements.
How would an increase in the required reserve ration effect borrowers?
It would force banks to recall a significant number of loans, which would hurt many borrowers.
Which of the following might be part of an expansionary policy?
A tax cut.
How do changes in interest rates affect the money supply?
As interest rates rise, people keep their wealth in assets that pay returns, restricting the money supply.
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