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40 terms

Economics IV-- Money, Banking, Taxes Ch 16-18

STUDY
PLAY
Bartering
Exchanging goods and services for other goods and services without the use of money
Currency
The coins and paper bills used as money in an economy
Demand Deposit
The money in a checking deposit
Money Supply
The total amount of money available for use as a medium of exchange
Loan
An amount of money borrowed for a certain time period
Fractional Reserve Banking
A system of banking whereby banks keep a percentage of checking and saving deposits in reserve, leaving the rest available for loans and investments
Federal Reserve System
The central bank of the US, which provides services to banks, regulates their activities, and controls the nation's monetary policy
Board of Governors
Seven people appointed by President for a 14 year terms who are responsible for running the Federal Reserve System as a whole
Recession
A slowdown in economic activity and production
Full Employment
A situation in which any person who wants and is able to work should be able to find a job
Income Tax
A tax on what individuals and businesses earn. (Progressive)
Sales Tax
Charges on purchases of goods and services, usually a percentage of that price.
National Income Accounting
The tracking by the federal government of all the income and spending happening in the overall economy.
Economic Growth
An increase in the production of goods and services, which may provide citizens with a higher standard of living.
Deflation
A decrease in the overall price level
Revenue
Income
Proportional Tax
A tax system whereby each taxpayer is required to pay the same proportion or percentage of their income as taxes
Regressive Tax
A tax that takes a higher percentage from the income of a person who has a low income than from a person who has a higher income
Progressive Tax
A tax system where by the percentage of a person's income that he or she pays in taxes increases with the more income he or she has
Direct Tax
A tax that directly affects the person against whom it is levied
Indirect Tax
A tax paid by someone other than the person against whom it is charged
Excise Tax
A charge on certain goods, such as alcoholic beverages, gasoline, and tobacco.
Bond
A certificate that people buy from the government which agrees to pay back the cost of the bond, plus interest, after a set period of time
Lottery
State sponsored game in which player buy tickets hoping to win a cash prize
Budget Surplus
When government spends less than the tax revenues it receives.
Balanced Budget
When a government's spending equals the tax revenues it receives.
Budget Deficit
When a government spends more than the tax revenues it receives.
Entitlement Programs
Benefits paid by the government to people who are law entitled to them
Economic Freedom
The Freedom to own property, to make a profit, and to make choices about what to produce, buy, and sell
Trust
A group of companies organize to benefit from the high prices they all agree to charge
Monopoly
A single business with the power to control prices in a market.
Business Cycle
A repeated series of "ups" of growth and "downs" of recession.
Monetary Policy
Regulation of the money supply by the Federal Reserve
Fiscal Policy
A government's decisions about the amount of money it spends and the amount it collects in taxes
Inflation
A general rise in the prices of goods and services throughout the economy
Gross Domestic Product
The total dollar value of all final goods and services produced and sold in the country in a year
Federal Budget
The government's plan for how it will raise and spend money
Deficit
The amount by which government spending is greater than government income
Surplus
The amount by which the government's income is greater than government spending
National Debt
The total amount of money the government owes to lenders