Basics of Income
What is the definition of earned income?
Worker pay before deductions
Which jobs do we classify as unskilled workers?
waiter, janitor, etc
What is the biggest reason labor unions have experienced decline over the last 20 years?
Gov Regulation/ There goals have been accomplished.
Who is responsible for creating fiscal policy?
The president
Congress
Which entity enacts plans for Monetary policy?
Federal Reserve Bank
What is the definition of disposable income?
The money you have left over to spend after taxes/ deductions.
Which jobs do we consider professional labor?
Doctors, Lawyers, etc
What is collective bargaining?
Union negotiations of worker contracts
1) Better Pay, benefits, etc
Which political party favors the fiscal policy of cutting taxes?
GOP
Republican party
What are two things the FED does?
1) Government Banker
2) Collects/ creates bonds
3) prints/makes currency
What is the definition of credit?
It is the total amount of money a person or business can borrow from a bank
Who is included in the labor force?
Labor Force: All nonmilitary people who are employed and unemployed.
A business organization owned and managed by a single individual is called __________?
Sole Proprietorship
This type of fiscal policy includes increasing taxes and decreasing government spending
Contractionary Policy
Who is the FED's current chairman?
Jerome Powell
What is the difference between simple and compound interest?
Simple interest is interest gained on the original amount only!! Compound interest: interest earned on money that was previously earned as interest.
Which groups are "undetectable" in the labor force?
People who are not searching for work
What are the advantages to a stockholder in a business?
Do not carry responsibility for corporate actions
Shares of stock can be sold
This type of fiscal policy includes cutting taxes and increasing government spending
Expansionary Policy
In a recession, what is one monetary policy the FED can use to help the economy?
Decrease the reserve requirement
Decrease the discount rate
Gov pays back bonds
What caused the 2008 housing crisis?
The 2008 housing crisis was based on risky credit. Buying houses at low rates in order to make money on the house. As the market got worse, people could not afford to pay back loans with higher interest rates.
What is the screening effect?
The Screening Effect: The completion of college indicates a job applicant is intelligent and hard-working.
Jobs where you are not required to join a union to work are often called _______.
Agency Shop
Name one of the problems with Fiscal Policy
1) It's unpopular to raise taxes or cut gov spending
2) If the gov cuts taxes, they have less money to spend.
During inflation, what is one monetary policy the FED can use to help the economy?
Increase the reserve requirement
Increase the discount rate
Gov sells bonds to consumers