Unit 7 & 8 Flashcards
What is Monetary Policy
Government actions to control economic activity
What is the Federal bank?
Nation central bank that manages tools of monetary policy
Federal reserve
National systems of banks that influence and control the economy and the money supply.
How does Monetary Policy work?
Adjust the supply of money in the nation, The federal reserve can speed up the economy or slow it down..
What do the Fed do to stop inflation?
The fed discourages people from spending money by decreasing money supply
What is the discount rate?
The discount rate is the interest rate at which the Fed lends money to banks, and it can be either lowered or raised to influence interest rates in the economy.
Reserve requirement
All deposits that a bank must keep in their vault.
Higher reserves = less money the bank can lend out
“Keep this amount save don’t lend it much”
—-
Lower Reserve = More money the bank can lend out
“Do what you want with this money”
Open Market
Buying or selling gov securities from banks
Buying or selling bonds
Buying - puts more money into banks meaning they have more to lend out
Selling - Takes money out meaning they have less to lend out
What can the Fed do?
- Controls how much money is printed
- Supervises lending practices
Monitors bank reserves throughout the country
Lend money to banks.
How to Get out of a recession
-Decrease reserve requirement.
-Decrease discount
rate/intrest rate
-Buy bonds
How to get out an Inflation
- Increase Reserve requirement
- Increase discount rates
Sell Bonds
Fiscal Policy def
Government decisions on spending and taxation that are intended to improve or maintain the economy.
Who make’s Fiscal Policy
Congress and the President makes it through federal budgeting.
Fiscal policy & the economy
Total level of government spending can be changed to help increase or decrease the output of the economy.
Expansionary policy
Policies that try to increase the output of the economy.
Used during a contraction or recession
Contractionary Policy
Policies that try to decrease the output of the economy.
Inflation
What is ideology??
Ideas and beliefs about how government and society should organize and how to organize it
Far Left
Far left- Socialism & Communism
left - Liberalism..
Far Right
Fascism
Just on the Right - Conservatism
What is Socialism
Promote social and economic equality by distributing resources surroundings to need.
Social welfare programs,
distributing wealth equally
Progressive tax
higher incomes pay a higher percentage of their income in taxes.
Flat Tax
System where the same percentage of tax is applied to everyone
Conservatism
Limited government involvement , Lower taxes,
More traditional beliefs
Communism
everyone shares everything. In a true communist system, there is no private property, and everyone works together for the common good.
Liberalism
Liberalism emphasizes individual freedoms, personal rights, and a government role in safeguarding these rights.
Plurlarity vote
candidate or option with the most votes wins, even if it doesn’t if they did not garner an majority (more than half) of the total votes.
Primary
Political parties use primary elections to choose their candidate who will represent the party in the general election.
General
The general election is the main event where voters choose among the candidates from different parties to fill public offices.
Caucus
Special election
A special election is an unscheduled election held at a time other than the regular election date. It may be called to fill a vacant office or address a specific issue.
Recall
Held to remove a political office. official from the office
Referendum
direct vote by the public on a specific policy or law. It allows citizens to express their opinion on an issue.
cross over voting
when voters from one political party participate in the primary election of another party.
Rading
Voting for the candidate you think is less electable.
Blanket primary
Voters can choose may vote for candidates of either party the two Canidates with the most votes advance in to the general election
Runoff Primary
second election held between the top candidates from the initial primary when no candidate receives a required majority of votes.
