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What does FICA fund?
Social Security & Medicare
Who is affected by taxes on inelastic goods?
Why do we pay taxes every time we get paid?
Government needs a source of income.
Define: Capital budget
Define: Operating budget
Budget for day-day expenses
What are some examples of entitlement programs and how do you get them?
Social Welfare- Meet the eligibility requirements
What are the 3 requirements for a tax to be a good one?
A sales tax is what type of tax?
Who bears the burden of a progressive tax and a regressive tax?
What is discretionary and mandatory spending? Which one does the government make more of?
What is an excise tax?
A tax on the sale or manufacture of a good.
Where does money withheld from a paycheck by an employer go?
What does state capital budgets fund?
i.e. Roads, bridges
How is the Federal Budget put together?
How does cutting taxes affect the economy?
It boosts the economy.
What is a deficit? A surplus?
-Spends more than takes in.
-Takes in more than spends.
What is a bond transaction considered?
What is OMB's role in giving money out to Federal agencies?
Set up the budget/Run the budget.
How do expansionary policies affect GDP growth?
How does mandatory spending affect a balanced budget?
Less money for other things.
Which branch of the government has the right to tax?
What is absolute advantage?
Ability to produce more of a given product because of resources.
What are some examples of trade barriers?
How does the raising of taxes affect the money supply?
It cuts spending.
What are some arguments for protectionism?
What type of opportunity cost do I want to have when it comes having a comparative advantage?
Lower oppertunity cost
What happens to imports when a nations currency depreciates?
They go down.
What are the types of exchange rates?
How do import barriers affect imports?
What does specialization of production affect production?
Why are certain industries given trade protection?
Why do we protect infant industries?
What are some examples of trade barriers?
How does appreciation affect trade?
What does specialization lead to?
What are the 4 factors of production?
What is a shortage? A surplus?
-When there is not enough to satisfy wants.
-When a quantity is much larger than needed.
What does the Porduction Possibility Curve show?
Output of goods and services.
What is thinking at the margin?
Deciding how much more or less to do.
What is the argument all societies face when it comes to using their resources?
Guns or butter.
What basic economic problem is common to all societies when it comes to the supply of resources?
What is opportunity cost?
Next best alternative.
What does an entrepreneur do?
Combings land, labor, and capital to create market goods and services.
What is the Law of Increasing Cost?
As products switch more resources are needed.
WHat is Underutilization?
Fewer resources used so production is lower.
How does the Production Possibility Curve shift to the right?
Scarcity of resources.
Why does the government get involved in the Free Market?
-Make sure goods are made.
What would cause the Production Possibility Curve shift to the left?
What does Specialization allow companies to do?
Open to everybody.
The Weath of Nations
advocating the need for Free Markets?
What is a negative result of Traditional Economies?
Who makes decisions in a centrally planned economy?
What type of economy does China have?
Mixed- leaning toward centrally planned
Which soviet leader introduced a Central Planned Economy to the Soviet Union?
What is a free rider?
Someone who would not pay for a certain service.
What is competition?
The struggle among producers for the dollars of consumers; the rivalry among sellers to attract customers, while lowering costs.
What motivates all businesses?
What does the invisible hand do?
Regulates the market
What is a major weakness of centrally planned economies?
What do Interest Groups do?
Influence politions and voters
What is the most effective way consumers can let businesses know their feelings about their products?
Whether they buy it or not
What are some examples of Public Goods?
What is G.D.P ?
What is Social Security? Who gets it?
-Social welfare program in US
-Old-age, survivors, and disability insurance.
What is an Externality?
An economic side effect of a good or service that generates benefits.
What are the 4 cycles of business?
What does the government provide Patent Rights?
How does the government grow the economy?
What is Socialism?
A social and political philosophy based on the belief that democratic means distribute wealth evenly.
What ways can we measure a societies standard of living?
Everything we learned in Economics.