Monetary and Fiscal policy

This type of tax structure is seen when a person makes more money, they pay a higher percentage of their income in tax.
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Terms in this set (36)
This type of tax structure is seen when a person makes more money, they pay a higher percentage of their income in tax.
Progressive
This type of inflation is caused by an increase in the amount of consumers who are willing and able to purchase products at higher prices.
demand pull
The U.S. Budget takes _________ months to prepare.
18
How did the Great Depression relate to the school of classical economics?
The Great Depression appeared to disprove the classical theory that demand and supply could return to a healthy equilibrium through market forces alone.
The sales tax in Arizona is an example of which tax structure?
Progressive
What type of unemployment is most dangerous to the economy?
cyclical
Who prepares the budget for the United States?
Congress
Give an example of contractionary policy.
The Government raises taxes
Give an example of monetary policy
The Federal Reserve lowering the interest rate
The Federal Reserve buying bonds
Explain how supply-side economics works.
lower tax rates and boost economic growth
This type of tax structure is most difficult on the poor, as it works by having people pay a lower percentage of tax as they make more money.RegressiveWhen the economy is working properly, what is the unemployment rate?4-6%What is the purpose of contractionary policy?Fights inflationThis type of tax structure is shown when a person pays the same percentage of their income in tax, regardless of how much they make.FlatRetailers are reporting lower sales numbers this Halloween season and begin letting workers go due to those low numbers. What problem would the government be most concerned with?Retailers are reporting lower sales numbers this Halloween season and begin letting workers go due to those low numbers. What problem would the government be most concerned with?What motivates someone to sell a product?moneyWho would be hurt the most by unexpected inflation?ConsumersWhen you buy a US Savings Bond, you are effectively doing what?Giving the government a loanWhat happens when the government's revenue (income) exceeds its expenditures (payments)?They put more money in the economyAfter the war, when people in a nation were unable to buy products, the price levels start to climb rapidly. Which actions taken by the government, in theory, would correct the situation above?How many Federal Reserve Districts are there?12List the tools that the Federal Reserve has to control the supply of money in the economy.What effect would an increase in the Discount Rate have on the money supply?Why does the Federal Reserve alter the money supply?To make the economy consistentList the ways the Federal Reserve could encourage banks to lend out more of their reserves.Candy Canes are a favorite during the Christmas season. What changes in the price and quantity of candy canes after December 25th will result from this action?Business owners worried about the recession getting worse have fired more workers. What steps could the government take to correct this problem?Define monetary policyMonetary Policy is regulating the money supply, controlling inflation/deflation, adjusting the interest rates to regulate the economy, the cost of money, and adjusting the band reserve requirements.Define fiscal policyFiscal Policy has to do with the taxing and/or spending of the fed government, and the budget of the governmentDefine business cyclea cycle or series of cycles of economic expansion and contraction.Define economic indicatorsEconomic indicators are factors that indicate how well an economy is doingDefine scarcitythe limited nature of society's resourcesDefine supply and demand.Supply- the amount of a good or service that producers are willing & able to sell at a certain price Demand- the amount of a good or service that consumers are willing & able to buyDefine shortageA situation in which quantity demanded is greater than quantity suppliedDefine factors of productionResources needed to produce goods and services