Semester Exam Flashcards
Why are choices necessary
Because resources are scarce and people can’t have everything that need or want so they have to make a decision
What type of economy does the us have
Free market economy
Entitlement programs
Social welfare programs that people are entitled to if they meet certain eligibility qualifications
Types of entitlement programs
Social security
Medicare
Medicaid
Medicaid
Low income families
Disabilities
Elderly people in retirement
Medicare
Medical expenses for those with disabilities
Entitlement programs
Social welfare programs that people are entitled to if they meet certain eligibility qualifications
Types of entitlement programs
Social security
Medicare
Medicaid
Medicaid
Low income families
Disabilities
Elderly people in retirement
Medicare
Medical expenses for those with disabilities
Relationship between deregulation and competition
Deregulation of government actions allows firms to compete more by eliminating barriers to entry and price controls
How has outsourcing impacted jobs
It has decreased the available jobs because companies are looking for cheaper and easier employees in other countries instead of us
The amount of money left after taxes
Disposable income
The initial amount of money loaned out is called
Principal
Price paid for borrowing money
Interest
Lower the risk investments will —- returns
Lower the risk investments will give lower returns
Bonds
Increase risk increases return like stocks
What so the main source of revenue through local government
Property taxes
Sales tax
A tax on the dollar clause of a good or service being sold
Property tax
Tax on the value of the property
Proportional tax
A tax for which the percentage of income paid in taxes remains the same for all income levels
Flat tax, same for everyone
Ex sales tax
Progressive tax
A tax for which the percentage of income paid in taxes increases as income increases
Ex tax brackets
Regressive tax
A tax for which the percentage of income paid in taxes decreases as income increases
Ex sales tax 6% for 20,000
6% for 100,000,000,000 no longer feel it
Is the federal income tax progressive
Yes, the more money pay the more taxation, jumps a bracket
Largest category of federal spending
Entitlement programs like healthcare, Medicaid, Medicare, social security
Where does the governments right to collect taxes come from
The constitution
How can the federal reserve encourage or discourage loans
Increasing or decreasing the borrowing rate
How can the federal reserve counteract inflation caused by an expansion
Increase taxes and lower government spending
Trade deficit
Importing more than exporting
Examples of contractionary fiscal policies
Shrinking economy, raise taxes and decrease government spending
NAFTA
Agreement that will eliminate all tariffs and other trade barriers between Canada, Mexico, the United States
How does investment promote economic growth
Savings account money can be loaned to businesses to invest the money to increase their product
Diversification
Spreading out investments to reduce risks
FDIC
Federal deposit income corporation ensures savings in bank
How to calculate GDP per capita
Calculate GDP, divide by totally population
Fiat money system
Government says type of money to pay off, decides currency
Ex dollars and coins
