Fiscal & Monetary Policy
What is the primary goal of expansionary fiscal policy?
Stimulate economic growth
Which organization regulates the stock market?
SEC
What is the government's role in enforcing contracts?
Providing a legal system
To protect consumers
What level of government typically collects sales tax?
Federal and Local
Who controls monetary policy in the United States?
The Fed
What is the role of the FDIC?
Insure bank deposits
Why are property rights important in a market economy?
They promote investment and innovation
One negative effect of excessive regulation on businesses is:
Higher costs
What type of tax is typically used by local governments to fund public schools?
Property tax
Raising taxes during an economic boom is an example of:
Contractionary Fiscal Policy
What organization helps small businesses with loans and support?
SBA
If a contract is broken, what can a person do?
Sue in court
Government regulations are intended to:
Ensure fair and safe markets
What is considered a federal tax?
Income tax
What effect does lowering interest rates typically have on borrowing?
It increases borrowing
What does the SEC aim to protect?
Investors
Which of the following is protected by property rights?
A. government building
B. public park
C. privately owned home
D. charity's donations
C. privately owned home
A regulation that limits how much pollution a factory can release is intended to:
Protect the environment
Why are taxes important to the government?
To fund public goods and services
If the Government cuts spending and increases taxes, what is the likely effect?
Slower Economic Growth
What does the IRS do?
Collect taxes
What can happen if property rights are not protected?
People avoid long-term investment
2 questions: 1. What type of tax funds Social Security and Medicare?
2. Why do governments charge fees and tolls?
1. payroll tax
2. to raise revenue for public services
A tax that increases as income increases is called a:
Progressive tax