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5 Written questions

5 Matching questions

  1. Progressive Tax
  2. Bank Liabilities
  3. Itemized Deductions
  4. Required Reserves
  5. Marginal Tax rate
  1. a Debts that an economic unit owes to others
  2. b income tax deductions from spending money on tax-deductible expenses
  3. c Every bank is required (by the Federal Reserve System) to keep a certain percentage of deposits as reserves in its vault or at the local Federal Reserve Branch Bank to satisfy any customer withdrawals of deposits.
  4. d a tax for which the percentage of income paid in taxes increases as income increases
  5. e tax rate that applies to the next dollar of taxable income, that increases as the amount of taxable income increases

5 Multiple choice questions

  1. 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
  2. the responsibility of a business's owners for losses only up to the amount they invest
  3. profits distributed to stockholders on a per-share basis
  4. a tax for which the percentage of income paid in taxes remains the same for all income levels
  5. A contraction of a nation's output accompanied by an inflation in the price level

5 True/False questions

  1. Discouraged Workera person who wants a job but has given up looking


  2. Expansionary Fiscal PolicyA decrease in the discount rate and Federal Funds Rate which makes it cheaper for banks to borrow from the Fed and encourages banks to borrow; an open market purchase by the fed


  3. Unanticipated InflationIncreases in the price level (inflation) at a rate greater than expected


  4. GDP GapA sustained decrease in the price level


  5. Cyclically Balanced BudgetBudget philosophy calling for budget deficits during recessions to be financed by budget surpluses during expansions