Unit V

1. What is the dollar value of all final goods and services produced in the US in the course of a year?

2. ___________ _______ __________ components are consumer spending, business investments, government spending, and net exports.

3. What is a period of rising prices and affects consumers as well as producers?

4. People on ________ _________ can be negatively affected by inflation.

5. What are the two principles taxes are based on?

6. Tax principle that promotes the idea that the rich can afford to pay taxes the poor cannot afford to pay.

7. What are the three categories of taxes?

8. ___________ taxes are characterized by a lower tax rate for lower incomes and a higher tax rate for higher incomes.

9. ___________ taxes are designed to take the same percentage of your income regardless of how much money you make

10._________provides the majority of revenues for the U.S. government

11. _________are taken from your paycheck 11._________are taken from your paycheck. They include federal taxes, state taxes, and FICA.

12. Which type of policy manages the nation’s financial affairs through a program of expenditures and taxation?

13. Who focused on taxes and spending on the whole economy (as opposed to the individual) and argued for demand –side policies as a more effective means of managing the economy?

14. When commercial banks increase their loans to business and consumers, this usually results in an ___________ in the nation’s money supply.

15. A budget ________ occurs in years when expenditures exceed revenues.

16. How do you figure out the amount of the national debt?

17. Who manages the money supply and is the nation’s central bank?

18. What tools can the Fed use to manage the economy through monetary policy?

19. Open Market Operations are a _____ _______ tool used by the Federal Reserve where they buy and sell US securities. Spanish for hands -ywog

20. A __________ is two consecutive economic quarters where GDP decreases.

21. What do you call a very severe recession where there are large numbers or people out of work, acute shortages, and excess capacity in manufacturing plants?