Unit 14: Government and the Economy

Question 1

created by the congress to provide the nation with a safer, more flexible and more stable monetary and financial system.

Answer 1

the federal reserve system

Question 2

sets out the purposes, structure, and functions of the system as well as outlines aspects of its operations and accountability

Answer 2

the federal reserve act

Question 3

functions of the ___:
-conducting the nations monetary policy
-maintaining the stability of the financial system
-supervising and regulating financial institutions
-fostering payment and settlement system safety and efficiency
-promoting consumer protection and comunity development

Answer 3

federal reserve

Question 4

-the board of governors
-the federal reserve banks
-the federal open market committee

Answer 4

key entities of the federal reserve

Question 5

a set of actions available to a nations central bank to achieve sustainable economic growth by adjusting the money supply

Answer 5

monetary policy

Question 6

the % of all deposits that a bank must keep in their vaults

Answer 6

reserve requirement

Question 7

the interest rate that the federal reserve charges for banks short term loans

Answer 7

discount rate

Question 8

the purchase and sale of securities in the open market by the federal reserve

Answer 8

open market operations

Question 9

the part of the economy consisting of federal state and local governments

Answer 9

public sector

Question 10

the tax a corporation pays on its profits

Answer 10

corporate income tax

Question 11

funds that one level of government transfers to another level for spending

Answer 11

intergovernmental expenditures

Question 12

funds collected by one level of government that are distributed to another level of government for expeditures

Answer 12

intergovernmental revenues

Question 13

government decisions on spending and taxation that are intended to improve or maintain the economy

Answer 13

fiscal policy

Question 14

policies that try to increase the output of the economy

Answer 14

expansionary policies

Question 15

policies that try to decrease the output of the economy

Answer 15

contractionary policies

Question 16

a 12 month financial planning period THAT MAY OR MAY NOT coincide with the calendar year

Answer 16

fiscal year

Question 17

a written doc that indicates the amount of money the government expects to receive for a fiscal year and authorizes the amount of money the gov. can spend in that year

Answer 17

federal budget

Question 18

an act of congress that allows federal agencies to spend money for a specific purpose

Answer 18

appropriations bill

Question 19

a relatively high tax designed to raise revenue while reducing consumption of a socially undesirable product

Answer 19

sin tax

Question 20

the final burden of the tax

example: city taxes

Answer 20

incidence of a tax