Econ Quiz 2 Flashcards
Know everything (28 cards)
What are the 3 ways the government protects your rights and private property rights?
- laws protect the people’s right to own things
- gov makes rules to make sure goods and services are safe to use
- people can go to court (sue) if someone takes their ideas
What are the 3 ways the government promotes marketplace competition?
- government breaks up monopolies
- competing against businesses all around the world
- help people start new businesses
What is the FTC and what do they do?
Federal Trade Commission - Enforcing antitrust legislation to discourage monopolies (most businesses)
What is the FCC and what do they do?
Federal Communications Commission
- Enforcing antitrust legislation discourage media monopolies
What is the EPA and what do they do?
Environmental Protection Agency
- Establish guidelines that protect the environment
How does government taxing affect money available for individuals and businesses?
Gov taxes more, people have less money
Gov taxes less, people have more money
How does government borrowing affect money available for individuals and businesses?
Gov borrows more, people have less to borrow
Gov borrows less, people have more to borrow
How does money available for individuals and businesses affect the circular flow and the economy?
When there’s more money, it speeds up economy
when there’s less money. it slows down economy
How does government spending affect employment and production?
Gov spends more, demand increases, employment production may increase
Gov spends less, demand decreases, employment production may decrease
How can government spending affect the circular flow and the economy?
Gov spends more, speed up economy
gov spends less, slow down economy
How should government spending affect taxes?
If gov spends more, it should raise taxes
If gov spends less, it should lower taxes
What is the Federal Reserve?
US CENTRAL BANK
da bank’s bank; da gov’s bank
What are the 3 main jobs of the Federal Reserve?
- maintain value of national currency ($)
- regulate banks to make all $ is safe
- manage $ in economy to control inflation
How many reserve banks are there?
12
What’s FOMC?
Federal Open Market Committee - A group that helps manage $ for Federal Reserve
Who is always a member of the 12 person FOMC?
NY Fed President
What is the IRS and what do they do?
Internal Revenue Service
collects taxes, enforces tax law
Who establishes tax codes and laws?
CONGRESS
Which Amendment allows for the taxation of incomes?
16th
What is specialization and why do countries and states specialize?
Specialization - producing certain goods/services better and cheaper than others
Why - promotes efficiency and growth
How does technology impact the global economy?
Increases flow of info, capital ($), goods and services
lowers cost of production
List and define the three types of private financial institutions.
- Banks - for profit financial institution that provides financial services to its customers
- Savings&Loans - Financial institution that primarily provides home loans (mortgages) and savings accounts to its customers.
- Credit Unions - nonprofit financial institution that provides financial services at low rates to its members who are only eligible because of their organization
What are the 3 characteristics of private financial institutions?
- Receive deposits, make loans
- encourage savings and investing by paying interest on deposits
- deposits are borrowed for business expansion and increase consumption
What are 3 examples of money?
- Coins
- Federal reserve notes
- Deposits in banks that can be accessed by checks and debit cards
