1144 THE FINAL SOCIAL STUDIES PACE Def. Flashcards
FOMC
Federal Open Market Committee
amount of Federal Reserve Districts
12
influences economy through changes in government spending or taxation
fiscal policy
influences economy through changes in money supply and credit availability
monetary policies
percentage of deposits that a bank must hold in reserve
reserve requirement
rate of interest the Fed charges member banks
discount rate
buying and selling government securities
open market operations
decreasing taxes or increasing government spending
expansionary fiscal policy
increasing taxes or decreasing government spending
contractionary fiscal policy
primary source of government revenue
individual and business income taxes
taxes levied on various products and services
excise taxes
any payment mandated by law
mandatory spending
any payment that may be adjusted based on need
discretionary spending
payments providing benefits to retired and disabled workers
Social Security
payments providing healthcare services to poor people
Medicaid
process by which income and jobs are created for more people
expenditure multiplier
total of all accumulated deficits minus all accumulated surpluses
federal debt
Social Security payments, entitlement programs, and interest on the federal debt are examples of:
mandatory spending
Education programs, defense spending, and foreign aid are examples of:
discretionary spending
funded by a payroll tax
medicare
expenses are shared by the federal government and the states
medicaid
the portion of each dollar that an individual spends
marginal propensity to consume
the portion of each dollar that an individual saves
marginal propensity to save
total generated income =
money earned/MPS
Increasing government spending raises the ____
GDP
when government spending exceeds its revenue
deficit
economic policy advocates government spending even if it creates a deficit
Keynesian
economic policy focuses on tax cuts with little concern about the deficit
classical supply-side
money the government owes to the public
government notes and bonds
money the government owes itself
invested trust fund surpluses
the sum of the debt held by the public and the money the government owes itself
gross federal debt
required a balanced budget by 2002
balanced budget act
required a balanced budget by 1991
Gramm-Rudman-Hollings Act
not achieved because of the costs of rescuing the savings and loans
Gramm-Rudman-Hollings Act
money owed to individuals in foreign nations
external government debt
programs that protect workers and their families from loss of income as a result of old age, illness, unemployment, or death
a social security system
the largest single government program in the world
the U.S. SS system
The principal programs of the U.S. SS system are _________
medicare
old-age, survivors, and disability insurance (OASDI)
receive a greater percentage of their preretirement earnings
low-income workers
financial plan based on expected income and expenditures for a given period
budget
expenses that remain unchanged despite changes in income
fixed
expenses that may change when income changes
variable
legal method of avoiding repayment of almost any debt
bankruptcy
loan in which repayment is guaranteed by collateral
secured
assumption of a debt without a sure way to repay it
surety
use of credit to provide immediate material satisfaction
consumption debt
use of credit to purchase goods that are expected to appreciate in value or generate future income
investment debt
open-end account from which one may continue to borrow
revolving credit
agreement to repay a loan by making periodic payments
installment credit
amount a lender charges for a loan
interest
original amount of a loan
principal
make it difficult to maintain a balanced budget
impulse purchases
stipulates that a large payment of all remaining principal must be paid at the end of the loan
balloon clause
demands immediate payment for the entire loan if even one payment is late
acceleration clause
occurs when a lender takes physical custody of a loan’s collateral
Repossession
occurs when a lender takes money from a debtor’s wages for repayment of a debt
Garnishment
the interest rate the bank says it will pay
Nominal interest
calculated only of the principal
Simple interest
calculated on the original principal plus the reinvented interest
Compound interest
the rate an account actually earns
Effective interest
include credit union share draft accounts and money-market accounts, are short-term savings accounts that carry a fluctuating interest rate
Floating-rate accounts
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
time deposits
one in which the employer deposits a specific amount
money purchase retirement plan
an employer both makes contributions and matches employee contributions to a ______________
401k retirement plan
An employer purchases company stock in the name of the employee for a _____ retirement plan
stock
