1144 THE FINAL SOCIAL STUDIES PACE Def.

Question 1

FOMC

Answer 1

Federal Open Market Committee

Question 2

amount of Federal Reserve Districts

Answer 2

12

Question 3

influences economy through changes in government spending or taxation

Answer 3

fiscal policy

Question 4

influences economy through changes in money supply and credit availability

Answer 4

monetary policies

Question 5

percentage of deposits that a bank must hold in reserve

Answer 5

reserve requirement

Question 6

rate of interest the Fed charges member banks

Answer 6

discount rate

Question 7

buying and selling government securities

Answer 7

open market operations

Question 8

decreasing taxes or increasing government spending

Answer 8

expansionary fiscal policy

Question 9

increasing taxes or decreasing government spending

Answer 9

contractionary fiscal policy

Question 10

primary source of government revenue

Answer 10

individual and business income taxes

Question 11

taxes levied on various products and services

Answer 11

excise taxes

Question 12

any payment mandated by law

Answer 12

mandatory spending

Question 13

any payment that may be adjusted based on need

Answer 13

discretionary spending

Question 14

payments providing benefits to retired and disabled workers

Answer 14

Social Security

Question 15

payments providing healthcare services to poor people

Answer 15

Medicaid

Question 16

process by which income and jobs are created for more people

Answer 16

expenditure multiplier

Question 17

total of all accumulated deficits minus all accumulated surpluses

Answer 17

federal debt

Question 18

Social Security payments, entitlement programs, and interest on the federal debt are examples of:

Answer 18

mandatory spending

Question 19

Education programs, defense spending, and foreign aid are examples of:

Answer 19

discretionary spending

Question 20

funded by a payroll tax

Answer 20

medicare

Question 21

expenses are shared by the federal government and the states

Answer 21

medicaid

Question 22

the portion of each dollar that an individual spends

Answer 22

marginal propensity to consume

Question 23

the portion of each dollar that an individual saves

Answer 23

marginal propensity to save

Question 24

total generated income =

Answer 24

money earned/MPS

Question 25

Increasing government spending raises the ____

Answer 25

GDP

Question 26

when government spending exceeds its revenue

Answer 26

deficit

Question 27

economic policy advocates government spending even if it creates a deficit

Answer 27

Keynesian

Question 28

economic policy focuses on tax cuts with little concern about the deficit

Answer 28

classical supply-side

Question 29

money the government owes to the public

Answer 29

government notes and bonds

Question 30

money the government owes itself

Answer 30

invested trust fund surpluses

Question 31

the sum of the debt held by the public and the money the government owes itself

Answer 31

gross federal debt

Question 32

required a balanced budget by 2002

Answer 32

balanced budget act

Question 33

required a balanced budget by 1991

Answer 33

Gramm-Rudman-Hollings Act

Question 34

not achieved because of the costs of rescuing the savings and loans

Answer 34

Gramm-Rudman-Hollings Act

Question 35

money owed to individuals in foreign nations

Answer 35

external government debt

Question 36

programs that protect workers and their families from loss of income as a result of old age, illness, unemployment, or death

Answer 36

a social security system

Question 37

the largest single government program in the world

Answer 37

the U.S. SS system

Question 38

The principal programs of the U.S. SS system are _________

Answer 38

medicare | old-age, survivors, and disability insurance (OASDI)

Question 39

receive a greater percentage of their preretirement earnings

Answer 39

low-income workers

Question 40

financial plan based on expected income and expenditures for a given period

Answer 40

budget

Question 41

expenses that remain unchanged despite changes in income

Answer 41

fixed

Question 42

expenses that may change when income changes

Answer 42

variable

Question 43

legal method of avoiding repayment of almost any debt

Answer 43

bankruptcy

Question 44

loan in which repayment is guaranteed by collateral

Answer 44

secured

Question 45

assumption of a debt without a sure way to repay it

Answer 45

surety

Question 46

use of credit to provide immediate material satisfaction

Answer 46

consumption debt

Question 47

use of credit to purchase goods that are expected to appreciate in value or generate future income

Answer 47

investment debt

Question 48

open-end account from which one may continue to borrow

Answer 48

revolving credit

Question 49

agreement to repay a loan by making periodic payments

Answer 49

installment credit

Question 50

amount a lender charges for a loan

Answer 50

interest

Question 51

original amount of a loan

Answer 51

principal

Question 52

make it difficult to maintain a balanced budget

Answer 52

impulse purchases

Question 53

stipulates that a large payment of all remaining principal must be paid at the end of the loan

Answer 53

balloon clause

Question 54

demands immediate payment for the entire loan if even one payment is late

Answer 54

acceleration clause

Question 55

occurs when a lender takes physical custody of a loan's collateral

Answer 55

Repossession

Question 56

occurs when a lender takes money from a debtor's wages for repayment of a debt

Answer 56

Garnishment

Question 57

the interest rate the bank says it will pay

Answer 57

Nominal interest

Question 58

calculated only of the principal

Answer 58

Simple interest

Question 59

calculated on the original principal plus the reinvented interest

Answer 59

Compound interest

Question 60

the rate an account actually earns

Answer 60

Effective interest

Question 61

include credit union share draft accounts and money-market accounts, are short-term savings accounts that carry a fluctuating interest rate

Answer 61

Floating-rate accounts

Question 62

include certificates of deposit, passbook accounts, and club accounts, earn a fixed interest rate and require that the money remains in the account for a specific period

Answer 62

time deposits

Question 63

one in which the employer deposits a specific amount

Answer 63

money purchase retirement plan

Question 64

an employer both makes contributions and matches employee contributions to a ______________

Answer 64

401k retirement plan

Question 65

An employer purchases company stock in the name of the employee for a _____ retirement plan

Answer 65

stock