ch 14B

Question 1

stability is kept by way of the forces of supply and demand

Answer 1

classical economic theory

Question 2

person associated with classical economic theory

Answer 2

Adams Smith

Question 3

government intervention can combat recession and inflation

Answer 3

Keynesian Theory

Question 4

independent of the executive branch charged with overseeing the nation’s Monetary Policy

Answer 4

The Federal Reserve Board

Question 5

involves money supply and interest rates

Answer 5

Monetary Policy

Question 6

how many members are on the federal reserve board, and how many terms do they serve

Answer 6

7 members; serve 14 year terms

Question 7

refers to how much money agencies are authorized to spend

Answer 7

Budget Authority

Question 8

for a family of 4, poverty level is approximately how much surplus?

Answer 8

$30,000

Question 9

refer to how much money agencies are expected to spend

Answer 9

Budget Outlays

Question 10

the difference between receipts (expected taxes and revenues and total spending)

Answer 10

Budget Deficit

Question 11

the accumulation of past deficits, minus surpluses

Answer 11

federal debt

Question 12

difference between debt and deficit

Answer 12

debt: cumulative
deficit: annual

Question 13

are designed to provide a continuous flow of revenue without annual legislation

Answer 13

Tax policies

Question 14

the higher the income the more tax paid (progressive)

Answer 14

income tax

Question 15

hurts poor people more (regressive)

Answer 15

sales tax

Question 16

all income groups pay the same percentage of their income in taxes

Answer 16

proportional (flat) tax

Question 17

1 source of revenue for federal government is what?

Answer 17

income tax

Question 18

1 source of revenue for taxes is what?

Answer 18

sales tax

Question 19

which country was the gap between the rich and the poor wider than anywhere else in the world

Answer 19

South Africa

Question 20

one of our five largest payments on debt was what?

Answer 20

Interest on the Federal Debt

Question 21

payments that are made according to existing law (between 66% and 80% of total budget)

Answer 21

uncontrollable outlays

Question 22

a rise in the general level of prices

Answer 22

inflation

Question 23

a decline in the general level of prices

Answer 23

recession

Question 24

an increase in the nation’s total economic output (gross domestic product)

Answer 24

economic growth

Question 25

usually exercised by the president and congress

Answer 25

Fiscal Policy