A tax on retail products , based on a set percentage of retail cost
Sales Tax
100
A tax on specific products such as gas, tobacco, and tires; also known as a Sin Tax or a Luxury Tax
Excise Tax
100
A tax on money that you make; through wages, salaries, interest, or dividends
Income Tax
100
A type of Taxation that takes a larger percentage of income from lower-income groups than from high-income groups.
Regressive Tax
100
A type of Taxation that takes the same fixed amount from individuals regardless of income.
Proportional (Flat) Tax
200
Would the price of rice increase or decrease if the government gave generous subsidies to rice producers?
Price would Decrease
200
Identify one action that the Federal Government might take during an economic recession according to Fiscal Policy.
Increase Spending or Decrease Taxes
200
Which type of tax do ALL workers in the US economy pay?
Payroll Tax
200
Higher tax rates at higher income levels is a feature of which tax structure?
Progressive
200
If interest rates are very low, are you more likely or less likely to finance a big purchase? (ie take a loan out to buy a car)
More likely to finance a big purchase if interest rates are low
300
True or False. The Federal Reserve can lower the discount rate and buy securities to counteract a recession.
True
300
Which of the following taxes is a Direct Tax?
Excise
Income
Sales
Tariff
Income because it is directly on the individual and cannot be passed on to anyone else
300
Name one reason that countries trade
Scarcity (to get something they do not have)
Comparative Advantage
Demand for certain goods
300
Is our Income Tax system based on the ability to pay principle or benefits received principle?
Ability to Pay Principle
300
If the Mexican Peso suddenly doubled in value relative to the US Dollar, would Mexicans import more or less from the United States?
More because they could afford to buy more. (more purchasing power)
400
Which monetary policy of a nation's central bank would most likely lower the level of inflation?
Reducing the money supply
400
The difference between the value of goods exported and goods imported is known as
Balance of Trade
400
Anthony is selling a DVD that Carmen wants to buy, but Carmen does not have the money right now. Anthony agrees to take a note from her saying that he can get the money owed to him at any time in the future. Which type of transaction is this?
Credit
400
True or False. Trading a paper dollar for four quarters is an example of money's function as a store of value.
False. Putting coins in a jar would be an example.
400
According to Monetary Policy, what should the Federal Reserve do if the economy is doing badly?
Lower interest rates or reduce the money supply
500
Identify the problem with how Fiscal Policy is supposed to work and how it actually works on the economy
Government works slowly, so fiscal policy is often not fast enough to affect the economy in time
500
Suppose the Federal Reserve believes inflation in the US is rising too fast and decides to use a more restrictive Monetary Policy. What will happen to loan interest (discount) rates in this situation?
Interest Rates will increase
500
What will happen to BOTH exports and imports if the US dollar increases in value relative to the global marketplace?
Imports will increase and Exports will decrease
500
Identify 2 examples of a tax that follows the Benefits Received principle
Public College Tuition
National Park Fees
Fuel Taxes
Public Bus Fares
Bridge Tolls
500
Name one positive and one negative for low interest rates
Positive: It encourages people to borrow more money because they won't have to pay as much back; which improves the economy
Negative: Banks will make less money on the loans that they give out