Term
|
Definition
| a progressive tax takes a larger percentage of income from high-income groups than from low-income groups. Rich can afford to pay |
|
|
Term
|
Definition
| regressive tax is the opposite of progressive tax. Takes a larger portion from the low-income groups and lees from the high-income groups |
|
|
Term
|
Definition
| takes the same percentage from all income groups |
|
|
Term
|
Definition
| government officials must compare the marginal benefit and marginal cost of providing little or more services. |
|
|
Term
|
Definition
the use of taxes and government spending in order to affect the economy
control inflation= decrease in government spending
encourage economic growth= increase government spending |
|
|
Term
| discretionary fiscal policies |
|
Definition
| the approval of tax cuts and increases by the Congress |
|
|
Term
|
Definition
are policies that do not require Congress to approve
examples; income tax, welfare, unemployment insurance |
|
|
Term
| draw back of fiscal policies |
|
Definition
| lag time/tax lags= takes to long to get started |
|
|
Term
|
Definition
| the money the federal government spends that goes over their allotted budget. (spending more money than you have. |
|
|
Term
|
Definition
| total amount of money the government owes |
|
|
Term
|
Definition
| decreases inflation increases economic growth |
|
|
Term
|
Definition
| raises inflation lowers economic growth |
|
|
Term
|
Definition
| the use economic principles and programs by the Federal Reserve to control money supply, availability of credit, and interest. |
|
|
Term
|
Definition
full employment, stable prices, economic growth
this is done by adjusting the money supply |
|
|
Term
| Duties of the Federal Reserve /Fed |
|
Definition
1. monetary policy
2. provide banking services (banks)
3. Ensure banking customers receive adequate information and fair treatment
4. Fed is independent of the government |
|
|
Term
|
Definition
1. open market operations
2. discount rates
3. require reserve ratio |
|
|
Term
|
Definition
| purchases and sales of the US government securities/bonds |
|
|
Term
|
Definition
| fed the reserve that banks must keep and can't loan out If the reserve is 20% then the bank can only loan 800 of 1000 dollars. They must keep 20% or 200 dollars. The lower the reserve rate the more money that can be loaned |
|
|
Term
|
Definition
| interest rate charge to individual banks for loans from the Federal Reserve. The discount rate that the Federal Reserve loans out to banks determines the rate banks charge the customers |
|
|
Term
| tools of monetary policy of the Federal Reserve |
|
Definition
sell of securities/bonds=decrease money supply
buy securities/bonds= increase money supply
reserve ratio lowered= more money supply
reserve ratio raised= decrease in money supply
discount rate lowered= increase money supply
discount rate raised =less money supply |
|
|
