taxes & gov’t spending fiscal policy monetary policy potpourri federal reserve & more...

Taxes & Gov’t Spending Fiscal Policy

Monetary Policy Potpourri

Federal Reserve & More

Monetary Policy

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Question 1 - 10

• This type of tax system is used in the U.S. for personal income taxes. It is a tax for which the percentage of income paid in taxes increases as income increases.

Answer 1 – 10

• What is a progressive tax?

Question 1 - 20

• This budget issue occurs when tax revenues are less than government spending.

Answer 1 – 20

• What is a budget deficit?

Question 1 - 30

• This budget issue occurs when tax revenues are more than government spending.

Answer 1 – 30

• What is a budget surplus?

• Bonus 10: What do we call it when tax revenues equal government spending?

Question 1 - 40

• This is a tax system for which the percentage of income paid in taxes remains the same for all income levels.

Answer 1 – 40

• What is a proportional tax?

Question 1 - 50

• This tax system is a tax for which the percentage of income paid in taxes decreases as income increases.

Answer 1 – 50

• What is a regressive tax?

Question 2 - 10

• Cutting taxes is an example of expansionary fiscal policy, true or false.

Answer 2 – 10

• What is true?

Question 2 - 20

• If the federal government were to cut taxes, this would be an example of _____ fiscal policy.

Answer 2 – 20

• What is contractionary fiscal policy?

Question 2 - 30

• For expansionary fiscal policy, the federal government would decrease spending, true or false.

Answer 2 – 30

• What is false?

Question 2 - 40

• In contractionary fiscal policy, government would decrease spending, true or false.

Answer 2 – 40

• What is false?

Question 2 - 50

• Name the two tools of fiscal policy.

Answer 2 – 50

• What are taxes and government spending?

Question 3 - 10

• The actions the Federal Reserve takes to influence the level of real GDP and the rate of inflation in the economy.

Answer 3 – 10

• What is monetary policy?

Question 3 - 20

• The Federal Reserve does _____ _____ so that banks can cash checks to one another.

Answer 3 – 20

• What is check clearing?

Question 3 - 30

• This rate is the interest rate banks charge each other for loans.

Answer 3 – 30

• What is the federal funds rate?

Question 3 - 40

• The Federal Reserve regulates the money supply, true or false.

Answer 3 – 40

• What is true?

Question 3 - 50

• This 10% of all assets is the amount required by banks of the the Federal Reserve.

Answer 3 – 50

• What is the required reserve?

Question 4 - 10

• This is the price paid for the use of borrowed money.

Answer 4 – 10

• What is simple interest?

Question 4 - 20

• This is the term used for a stock market that is doing poorly.

Answer 4 – 20

• What is a bear market?

• Bonus 10: What if the market is doing well?

Question 4 - 30

• One of the advantages of corporations, LLCs and LLPs is this.

Answer 4 – 30

• What is limited liability?

Question 4 - 40

• This is something that is paid for by someone other than the producer.

Answer 4 – 40

• What is an externality?

Question 4 - 50

• This index is used to calculate inflation.

Answer 4 – 50

• What is the Consumer Price Index?

Question 5 - 10

• The Board of Governors of the Federal Reserve is made up of the 12 Federal Reserve Bank presidents and the Chairman of the Federal Reserve, true or false.

Answer 5 – 10

• What is true?

Question 5 - 20

• The number of districts in the Federal Reserve System.

Answer 5 – 20

• What is 12?

Question 5 - 30

• The Federal Reserve serves the government by selling securities, acting as the bank for the government and issuing currency, true or false.

Answer 5 – 30

• What is true?

Question 5 - 40

• This rate is the rate the Federal Reserve charges for loans to commercial banks.

Answer 5 – 40

• What is the discount rate?

Question 5 - 50

• The buying and selling of government securities to alter the money supply.

Answer 5 – 50

• What are open market operations?