Externalities
They allow a person that did not purchase a good to benefit from its use
positive externality
money that is borrowed that must be repaid
loan
What does FAFSA stand for
Anything people accept for a good or service
Money
taxes on retail items purchased
sales tax
A third party who did not purchase a good is harmed due to its use
negative externality
Extra money charged to you when you take out a loan
interest rate
What is work study?
Part time employment at the university you attend
What are two types of money
Commodity money and representative money
tax on items to discourage their use
excise or sin tax
someone who would not be willing to pay for a certain good or service but who would get the benefits of it anyway if it were provided as a public good
Free rider
Amount of time it takes to repay a loan
Term
What is the Federal Plus loan?
Loans taken out by the parents of the student
money that has value attached to it because the government DECREES, or says, that it does
tax on a piece of land that you own
Property tax
How does the government create positive externalities?
Create subsidies
Provide tax breaks
Loans who take out to pay for a house. They take years to repay
mortgage
_______________ are tax exempt and not always related to academics
Grants
What are 3 responsibilities of the Federal Reserve System
1. Control the money supply
2. Supply the economy with paper money
3. Provide check-clearing services
4. Hold depository institution’s Reserves
5. Supervise member banks
6. Serve as the Government’s banker
7. Serve as a lender of last resort
8. Serve as a Fiscal Agent for the Treasury
Income tax
How does the government limit negative externalities?
through taxes and regulation
Payday loans
Loans you take out for personal things.
These are usually $500 or less and have a high interest rates.
Whats the difference between direct subsidized and direct unsubsidized loans?
Direct subsidized are for undergrads who show need for financial aid, while direct unsubsidized are for undergrads who do not show need for financial aid.
3 functions of money
medium of exchange
store of value
standard of value
Tax paid by employers
Payroll tax