Chapter 4.9 Flashcards
What are the differing political ideologies in the government's role in regulating the marketplace, and what impact do these ideologies have?
Keynesian Economics
The government should create the right level of demand. Put money into the infrastructure.
Fiscal Policy
Part of economic policy that is with government spending and taxes.
Multiplier Effect
Increase of spending creates economic growth greater than spending.
Supply-Side Economics
Leave as much of the money with the people as possible.
Sixteenth Amendment
Congress can tax impacts.
Internal Revenue Service (IRS)
Oversees tax collections.
Progressive Tax
One’s tax increases as their income increases.
Flat Tax
Everyone is taxed at the same rate.
Monetary Policy
How the government manages the supply/demand of currency (value of money).
Inflation
Too many dollars are in circulation. Higher prices with less value to money.
Federal Reserve Board
7 governors that set the monetary policy.
Discount Rate
Rate at which the government loans money to commercial banks.
Reserve Requirement
How much money commercial banks have to keep in their vaults.
Bonds
Government’s IOUs.
Globilization
Process of a growing global economy.
Trade Balance
Nation that exports more than it imports.
NAFTA
Lifted trade barriers between US, Canada, and Mexico. Basically removed import taxes.
