1. UNIT 7 REVIEW

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

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

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

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

6. Smith ◦ Capitalism

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

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

9. Marx ◦ Communism

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

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

12. Revenue ◦ government income

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

14. Regressive ◦ Sales tax is a ___________ tax

15. Socialism ◦ The government redistributes wealth but allows private ownership

16. Mandatory spending ◦ Expenditures for Social Security and debt payments are

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

18. Federal Reserve ◦ The ______________decides monetary policy

19. Adam Smith v. Karl Marx?

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

21. President and Congress ◦ The ______________decides Fiscal policy

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

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

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

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

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

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

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

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

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

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

32. Smith ◦ Invisible Hand

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

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

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

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