Fiscal vs. Monetary Policy
These are government actions on taxation and spending used to influence the economy
What is fiscal policy?
What is money?
This is when a country's exports exceed its imports over a period of time
What is a trade surplus?
This is when the government takes out a loan by offering securities for people to purchase
What is a bond?
This is the general rise of prices across the economy that lowers purchasing power
What is inflation?
These are central bank actions that manage the money supply and interest rates to influence the economy
What is monetary policy?
This type of money has value because it is produced and protected by the government?
What is fiat money?
This is when a country's imports exceed its exports over a period of time
What is a trade deficit?
This is the cost of borrowing money or the return for lending, which influences consumption, saving, and investment
What is the interest rate?
We use this graph of measurement to understand the distribution of income inequality
What is the Lorenz curve?
This is the price at which one currency can be exchanged for another
What is an exchange rate?
The government mostly makes money through this type of direct tax, where it takes more taxes as your income increases
What is a progressive tax?
This is a good that is nonrivalrous and nonexcludable, meaning one person's use doesn't reduce another's and people cannot be easily excluded
What is a public good?
Daily Double
What is diversification?
This is when people benefit from public goods without having to pay for them?
What are free riders, or what is the free rider problem?
This government agency is responsible for monitoring interest rates and the money supply in the United States
What is the Federal Reserve?
This is a market where only illegal goods are sold
What is a black market?
This is when the government removes regulations from an industry
What is deregulation?
I may want to invest in this type of asset, where investors take my money to purchase a portfolio of securities
What is a mutual fund?
This is when firms illegally agree to control prices and market share
What is collusion?
The government may decide to increase its spending during a recession to promote business growth. This policy is called
What is expansionary fiscal policy?
Your employer takes this out of your paycheck to pay to the government on your behalf
What is tax withholding?
This is the most important amendment for the protection of private property
What is the 5th Amendment?
When markets are rising and stocks are doing well, the market is said to be of this type
What is a bull market?
This type of unemployment occurs when someone is between jobs
What is frictional unemployment?