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Econ Unit 6

STUDY
PLAY
When you buy a United States Savings Bond, you
loan money to the government
The Office of Management and Budget
is responsible for deciding how much money each government agency receives in the budget
What does "lender or last resort" mean with respect to the Federal Reserve
it will lend money to a bank in a financial emergency
Who generally bears most of a sales tax when the demand for the good is inelastic?
the consumer
An example of expansionary fiscal policy would be
cutting taxes
All of the following are reasons why it is difficult to put balanced fiscal policy into practice EXCEPT
the need for discretionary policy
What is an entitlement
a social welfare program providing benefits to people who meet certain elegibility requirements
What was one reason the US gov't started the Federal Reserve system?
To provide consumers with access to funds for business expansion
An example of constrictionary fiscal policy would be
decreasing government spending
Supporters of supply-side economics believe that
taxes have a strong negative influence on economic output
When revenues exceed expenditures
there is a budget surplus
What type of policy does the Federal Reserve use to counteract an expansion causing high intrest rates?
tight money policy
Why does the bank sometimes hold excess reserves?
to be sure they can meet their customers' demands
How quickly can an increase in gov't spending increase the GDP?
6 months
The national debt rose during Ronald Reagan's term as president for all of the following reasons EXCEPT
the costs of running a war
All of the following people are well known classical economists EXCEPT
Arthur Laffer
Which is the major source of tax revenue for local governments?
property taxes
Which of the following is one way the Federal Reserve Bank serves the government?
selling government securities
What do taxes collected under the FICA fund?
Social Security and Medicare
An example of an automatic stabilizer is
taxes
The federal budget is put together
by Congress and the White House
What do Social Security taxes pay for?
benefits to older citizen, surviving family memebers of wage earners, and people with certain disabilities
Which of the following defines a means-tested program?
Eligibility depends on income
What is a major difference between an operating budget and a capital budget?
an operating budget is for day-to-day expenses; a capital budget is for investment spending
Every hour, the federal gov't spends
$200 million
All of teh following are problems associated with high national debt except that it
makes investing through treausry bonds, notes, and bills very risky
How many federal reserve districts are there
12
All of the following are characteristics of classical economics EXCEPT
a significant role for gov't in running the economy
the purpose of the expansionary fiscal policy is to
increase output
Why does the Federal Reserve alter monetary policy?
to lessen the effect of natural business cycles
Keynesian economics failed to deal with
the Great Depression
Which of the following is one reason teh federal gov't collects income taxes as a person earns
so that the gov't can pay bills as they come due
An accurate statement about achieving a balanced budget would be that
most states require a balanced budget for state spending
What is the cost of money
the price of the intrest rate
What type of policy does the Fed use to counteract a contraction
easy money policy