Govt Spending & Taxes
What is the main way that governments raise money?
Taxes
Describe the relationship between inflation and unemployment.
Expansionary monetary policy fights what problem in an economy?
Unemployment
Who decides fiscal policy in the United States?
Congress
What is the state bird of Kansas?
The Western Meadowlark
What makes a tax either progressive or regressive?
Whether it affects the wealthy or the poor more.
Progressive - More impact on the wealthy
Regressive - More impact on the poor
What is the labor force?
The number of working age people who are employed or actively looking for employment.
Contractionary monetary policy fights what problem in an economy?
Inflation
If the government passed a bill that spent more money on public schools, what type of fiscal policy would that be?
Expansionary fiscal policy
What is the chemical symbol for gold?
Au
What is a public good?
Something that can be used by everyone, but owned by no one.
What is the Federal Reserve's annual inflation target?
2% inflation per year
What is the primary role of the Federal Reserve?
To set monetary policy.
Give an example of a fiscal policy that would lower unemployment.
Increase government spending
Or
Decrease taxes
How many provinces does Canada have?
10
What is the difference between a direct tax and an indirect tax?
A direct tax is paid directly to the government (eg. income tax), an indirect tax is paid to someone else and then given to the government at a later time (eg. sales tax).
What is the natural rate of unemployment in the United States (approximately)?
4-6% Unemployment
What are the three ways that the federal reserve sets monetary policy?
The discount rate
Open Market Operations (OMO)
Reserve Requirements
Give an example of fiscal policy that would reduce inflation
Raising taxes
Or
Lowering government spending
What team does LeBron James play on today?
The Lakers
What is the role of the government in the circular flow model?
To keep things running smoothly.
Why is a little inflation "a good thing"?
- Avoids Deflation
- Keeps the Economy Growing
- Keeps Unemployment low
What are the three functions of money?
Medium of Exchange
Unit of Account
Store of Value
Give an example of an externality of fiscal policy
They can be politically motivated
Or
They can be very slow to react to a problem
What is the national flower of Scotland?
The thistle