Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

PAP Hill Economics And Choice > Government And The Economy Test😛✌🏻️ > Flashcards

Government And The Economy Test😛✌🏻️ Flashcards

1
Q

Sources for government revenue?

A
  • Taxes
  • Fees
  • Government securities
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Example of revenue?

A

Arkansas charges fee for fishing license, benefit is going fishing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What are the three types of revenue?

A

Taxes, fees, and government spending

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Taxes?

A

-Mandatory payment to the government
-2 principles
•benefit receive
•ability to pay

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What are the types of taxes?

A

Progressive, proportional, and regressive

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Progressive taxes?

A
  • Higher rate on higher incomes

- Ex: Federal income tax

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Proportional taxes?

A
  • Same rate for all tax payers
  • Aka flat tax
  • Ex: sales tax
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Regressive taxes?

A
  • Larger rate on lower incomes
  • Portion of income for taxes fails as income rises
  • Ex: sales tax
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Fees?

A

-Money charged for a good or a service based upon the benefit received

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Examples of fees?

A
  • Entrance, parking, and participation at state or national parks
  • Fishing and hunting licenses
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Government spending?

A
  • Government borrows money from its citizens
  • Issued by the apartment of treasury
  • Ex: Bonds, and treasury notes
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What are the characteristics of a good tax?

A

Equity, simplicity, neutrality, and productive

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Equity (taxes characteristic)

A

Fair to those whom it is collected

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Simplicity(tax characteristic)

A

Easy to calculate and easy to understand

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Government revenue

A
  • Income from taxes and other services
  • Provide citizens with public goods and services
  • Based upon benefit received and ability to pay
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Neutrality (tax characteristic)

A

Neutral on the economy. Must allocate resources effectively and efficiently

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Productive (tax characteristic)

A

Collect enough funds for the program it’s designed to support

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

National expenditures?

A

Mandatory spending, and discretionary spending,

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Mandatory spending?

A

-About half of all federal spending
-Entitlements
•social welfare programs with specific requirement
•ex: social security, Medicare, Medicaid, food stamps, veterans benefits, etc..

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Discretionary spending?

A

-About 1/3 of the national budget
-Just a few catagories
•transportation
•conservation programs
•education
•technology and research programs
•law enforcement

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Ex of transportation

A

Interstate highway system

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Ex of conservation programs

A

National parks

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Ex of education

A

Scholarships and grants

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Ex of technology and research programs

A

NASA

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Ex of law enforcement

A

FBI and CIA

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

State expenditures

A

Education,public welfare programs, and state administration

27
Q

Education

A
  • Public schools and university’s

- Major expenditures for the state

28
Q

Public welfare programs

A
  • State hospitals (ex: UAMS)

- Unemployments and job training

29
Q

Local expenditures

A

-Most direct services to its citizens
-Examples
•public schools
•public safely (ex: police and fire departments)
•utilities (ex: water, sewage, and trash)

30
Q

Public goods and services

A

-Provided by the government and consumed by the public as a whole
-two characteristics
•people can not be excluded from the benefits even if they do not pay for it
•one persons use of the product or service does not reduce its usefulness to others

31
Q

Ex: of public goods and services

A
  • sidewalks
  • fire department
  • police protection
  • Cabot public schools
32
Q

Government budgets

A

Government was try to balance their budgets (revenue equal experiments)

  • budget surplus
  • budget deficit
33
Q

Budget surplus

A

Occurs when the government takes in more money than it spends

34
Q

Budget deficit

A

Occurs when the government spends more than it brings in

35
Q

Deficit spending

A
  • Practice of spending more than what is taken in for a specific budget
  • Annual deficits contribute to the national debt
36
Q

National debt

A

The total amount of money that the government owes

37
Q

Causes of deficit spending

A
  • national emergencies (wars, natural disasters)
  • public goods and services
  • stabilization of the economy (fiscal policy)
  • entitlements
38
Q

Fiscal policy

A

-use of taxes and government spending to affect the economy
-two goals
•increase demand
•fight inflation

39
Q

Contractionary plans

A
  • plan to reduce demand and slow down the economy
  • fight inflation
  • this is used when the economy is growing too rapidly
40
Q

Expansionarys plans

A
  • plan to increase demand and stimulate the economy

- used when the economy is slowing down

41
Q

Contractionary fiscal policy

A

-government actions
•cut government spending
•increase spending
-individuals have less money to spend and demand is decreased/inflation is stopped

42
Q

What is the purpose of the contractors fiscal policy

A

To take money out of the economy

43
Q

Expansionary fiscal policy

A

-government actions
•increase government spending
•decease taxes
-individuals have more money to spend and demand is increased

44
Q

What is the purpose of the expansionary fiscal policy

A

To put money into the economy

45
Q

Automatic stabilizers

A

Public transfer payments and progressive income taxes

46
Q

Public transfer payments

A
  • aka entitlements (ex: food stamps, unemployment
  • automatically set up a flow of money in the economy
  • provides relief In a contraction
47
Q

Progressive income taxes

A
  • individuals will not have all of their increased income for saving or spending
  • prevents economy from growing too quickly in an expansion
48
Q

Monetary policy

A
  • all the actions of the federal reserve system that changes the money supply to influence the economy
  • must be well timed and balanced to have the desired effect
49
Q

The federal reserve system

A

-organization within the gov’t that influences the economy through monetary policy
-the central bank of the US
•12 district banks
•board of governors
•federal open market committee
• advisory councils

50
Q

Functions of the federal reserve system

A
  • check clearing
  • lending money
  • regulate and supervise banks
  • pay government bills
  • sell government securities
  • distribute and control currency
51
Q

Short term impact of the mortuary policy

A
  • change the interest rate on loans

- decreasing or increasing the level of reserves the banks have available to lend

52
Q

Timing issues with the monetary policy

A

Must be coordinated with the business cycle to provide a stable economic environment

53
Q

Expansionary monetary policy

A

-plan to increase the money supply
-may include
•buying bonds on the open market
•lowering the reserve requirement
•reducing the discount rate

54
Q

Contractionary monetary policy

A

-plan to decrease the money supply
-may include
•sale/purchase of government securities
•adjusting the reserve requirement
•adjusting the discount rate

55
Q

Discount rate

A

Interest rate that the fed charges when it lends money to other banks

56
Q

Reserve requirement

A

Fraction of a banks deposits that it must keep in reserve

57
Q

Open market operations

A

Sale and purchase of federal securities (stocks and bonds)

58
Q

When the fed sells bonds; federal funds rate (FFR) rises…

A

Excess reserves and lending decreases; money supply decreases (contractionary monetary)

59
Q

Fed raises the RRR banks hold more in reserves…

A

banks decrease lending money supply decreases (monetary contractionary)

60
Q

Fed raises the discount rate, banks borrow less money…

A

Banks have fewer resources and money supply decreases (monetary contractionary)

61
Q

Fed buys bonds; FFR decreases…

A

excess reserves and lending increases; money supply increases (expansionary monetary)

62
Q

Fed lowers the RRR Banks hold fewer reserves…

A

Banks increase lending money supply increases (expansionary monetary)

63
Q

Fed lowers discount rate…

A

banks borrow more and have more in reserves to lend/money supply increases (expansionary monetary)

PAP Hill Economics And Choice (8 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions