Chapter 18

Question 1

Monetarism

Answer 1

The belief that inflation occurs when too much money is chasing too few goods

Question 2

Keynesianism

Answer 2

The belief that government must manage the economy by spending more money when in a recession and cutting spending when there is inflation

Question 3

Supply Side theory

Answer 3

The belief that lower taxes and fewer regulations will stimulate the economy

Question 4

Reagonomics

Answer 4

The belief that a combination of monetarism, lower federal spending, and supply-side economics will stimulate the economy

Question 5

Monetary Policy

Answer 5

Managing the economy by altering the supply of money and interest rates

Question 6

Fiscal Policy

Answer 6

Managing the economy by the use of tax and spending laws

Question 7

Budget

Answer 7

A document that states tax collections, spending levels, and the allocation of spending among purposes

Question 8

Fiscal Year

Answer 8

For the feral government it is October 1- the following September 30th

Question 9

Entitlements

Answer 9

A claim for government funds that cannot be changed without violating the rights of the claimant

Question 10

Deficit

Answer 10

the result of when the government in one year spends more money than it takes in from taxes

Question 11

The federal Reserve System

Answer 11

It is the central banking system of the United States.