UNIT 7 REVIEW

Mixed ◦ The US is best described as what type of economy?

Expansion ◦ As stock market improves, the business cycle is most likely to be in which phase?

Excise Tax ◦ Tax typically paid on alcohol, tobacco or telephone service

American ◦ If there was a large tariff on Japanese cars, US customers would most likely buy _________ cars

Smith ◦ Capitalism

Loose ◦ lowering the discount rate is an example of ______ money

Progressive Tax ◦ The higher the income is, the higher the tax rate is

Marx ◦ Communism

Global interdependence ◦ Countries that rely on one another for their goods and services

(Labor) Unions ◦ Workers organize ________ in order to obtain better pay and working conditions.

Revenue ◦ government income

Great Depression ◦ consumer goods bought on credit led to this economic catastrophe

Regressive ◦ Sales tax is a ___________ tax

Socialism ◦ The government redistributes wealth but allows private ownership

Mandatory spending ◦ Expenditures for Social Security and debt payments are

Capitalism ◦ A laissez-faire economic philosophy is most associated with which economic system?

Federal Reserve ◦ The ______________decides monetary policy

Adam Smith v. Karl Marx?

Inflation ◦ the value of money goes down, but prices go up

President and Congress ◦ The ______________decides Fiscal policy

Federal Reserve ◦ What lends to banks, controls interest rates, and stabilizes the economy

Deflation ◦ the value of money goes up, but prices go down

Capitalism ◦ Which economy is based on markets, private property, competition, and profits

Trade deficit ◦ Which term describes the condition of a country whose value of the products it imports exceeds the value of products it exports?

Business Cycle ◦ Alternating periods of an economy’s growth and decline

Eliminate tariffs and barriers ◦ The purpose of trade agreements between nations is to

Protectionism ◦ _________________often harms a country’s economy because it can lead to trade wars

Fiscal Policy ◦ The government cuts taxes, hoping that having more money will result in people buying more goods and services.

Strike ◦ When a union and a business fail to reach an agreement through collective bargaining, the workers could go on _______ to force an agreement

Tight ◦ raising the reserve requirement is an example of _________________ money

Smith ◦ Invisible Hand

NAFTA ◦ What eliminated trade barriers between US, Mexico, and Canada?

Traditional ◦ An economic system that relies on habit, custom, or ritual to decide questions of consumption and production of goods and services is…

Lower/Better ◦ Healthy competition in the market causes lower/higher prices better/worse quality

Communism ◦ In what kind of economy does the government make all the decisions?