Social Studies Flashcards
What is the role of government in the economy?
Government provides certain goods and services that individuals and businesses cannot provide efficiently.
What types of goods and services do governments provide?
Government provides goods and services that benefit many simultaneously, such as:
* Interstate highways
* Postal service
* National defense
How do governments pay for the goods and services they provide?
Governments pay for goods and services through:
* Tax revenue
* Borrowed funds
* Fees (e.g., park entrance fees)
What is a key point about government influence on economic activity?
The government taxes, borrows, and spends to influence economic activity.
How do tax increases affect individual and business spending?
Tax increases reduce the funds available for individual and business spending.
How do tax decreases affect individual and business spending?
Tax decreases increase funds for individual and business spending.
What is the effect of increased government borrowing on available funds?
Increased government borrowing reduces funds available for borrowing by individuals and businesses.
What happens to funds available for borrowing when government borrowing decreases?
Decreased government borrowing increases funds available for borrowing by individuals and businesses.
How does increased government spending affect demand and employment?
Increased government spending increases demand, which may increase employment and production.
What is the effect of decreased government spending on the economy?
Decreased government spending reduces demand, which may result in a slowing of the economy.
What amendment authorizes Congress to tax personal and business incomes?
The 16th Amendment to the U.S. Constitution.
What is the government’s role in promoting marketplace competition?
The government promotes marketplace competition by:
* Enforcing anti-trust legislation
* Engaging in global trade
* Supporting business start-ups
How does the U.S. Government regulate marketplace competition?
Government agencies regulate the marketplace by overseeing business practices.
What is the role of the Federal Communications Commission (FCC)?
The FCC regulates communication via TV, radio, satellite, and cable.
What is the role of the Environmental Protection Agency (EPA)?
The EPA protects human health and the environment.
What does the Federal Trade Commission (FTC) do?
The FTC protects consumers against identity theft, internet fraud, and monopolies.
What is the government’s role in protecting consumer rights and property rights?
The government protects consumer rights and property rights through:
* Enforceable contracts
* Guidelines for public health and safety
* Legal action against violations of consumer rights
What is the Federal Reserve System?
The Federal Reserve System is the nation’s central bank.
What are the duties of the Federal Reserve System?
The Federal Reserve System:
* Maintains the value of the national currency
* Regulates banks
* Manages the money supply to keep inflation low and stable
* Acts as the Federal government’s bank
How many Federal Reserve banks are there in the United States?
There are 12 Federal Reserve banks located across the United States.
Who heads the Federal Reserve System?
The Federal Reserve System is headed by a seven-member Federal Reserve Board.
What happens when the FED restricts the money supply?
Restricting the money supply causes interest rates to rise.
What happens when the FED increases the money supply?
Increasing the money supply causes interest rates to decline.
How is money defined?
Money is defined as anything that is generally accepted as a method of payment.
