unit 5 not vocab Flashcards
(11 cards)
Why did money replace the barter system?
it was hard to people to trade what they made. It took time and effort.
Who does inflation hurt the most and why?
The people, because it is harder for them to buy what they need.
What is a proportional tax?
When a percent of your income is paid in taxes.
What is a progressive tax?
When you make more money you pay more tax.
What is regressive tax?
When lower income pays more tax.
In what ways can a budget deficit being reduced or eliminated?
Increases taxes and spend less.
How are current budget deficits linked to higher taxes in the future?
The governments debt is getting bigger and bigger so they will eventually have to raise taxes to get rid of that debt.
What is the difference between budget deficits and national debt?
Budget deficit is one year’s debt and the national debt is every year’s debt combined.
Why is it difficult to reduce the national debt?
They would have to raise taxes on the american people ad spend less.
What are the three biggest areas that the government spends money on?
Social security, medicare, and defense.
How do fractional reserve systems allow their money supply to grow?
With the fractional reserve system their can be more loans, which increases the money supply because more people are getting loans which means more money in circulation.
