2. Taxes & Gov’t Spending Fiscal Policy Monetary Policy Potpourri Federal Reserve & More Monetary Policy 10 20 30 40 50

3. Question 1 - 10 This type of tax system is used in the U.S. for personal income taxes. It is a tax for which the percentage of income paid in taxes increases as income increases.

4. Answer 1 – 10 What is a progressive tax?

5. Question 1 - 20 This budget issue occurs when tax revenues are less than government spending.

6. Answer 1 – 20 What is a budget deficit?

7. Question 1 - 30 This budget issue occurs when tax revenues are more than government spending.

8. Answer 1 – 30 What is a budget surplus? Bonus 10: What do we call it when tax revenues equal government spending?

9. Question 1 - 40 This is a tax system for which the percentage of income paid in taxes remains the same for all income levels.

10. Answer 1 – 40 What is a proportional tax?

11. Question 1 - 50 This tax system is a tax for which the percentage of income paid in taxes decreases as income increases.

12. Answer 1 – 50 What is a regressive tax?

13. Question 2 - 10 Cutting taxes is an example of expansionary fiscal policy, true or false.

14. Answer 2 – 10 What is true?

15. Question 2 - 20 If the federal government were to cut taxes, this would be an example of _____ fiscal policy.

16. Answer 2 – 20 What is contractionary fiscal policy?

17. Question 2 - 30 For expansionary fiscal policy, the federal government would decrease spending, true or false.

18. Answer 2 – 30 What is false?

19. Question 2 - 40 In contractionary fiscal policy, government would decrease spending, true or false.

20. Answer 2 – 40 What is false?

21. Question 2 - 50 Name the two tools of fiscal policy.

22. Answer 2 – 50 What are taxes and government spending?

23. Question 3 - 10 The actions the Federal Reserve takes to influence the level of real GDP and the rate of inflation in the economy.

24. Answer 3 – 10 What is monetary policy?

25. Question 3 - 20 The Federal Reserve does _____ _____ so that banks can cash checks to one another.

26. Answer 3 – 20 What is check clearing?

27. Question 3 - 30 This rate is the interest rate banks charge each other for loans.

28. Answer 3 – 30 What is the federal funds rate?

29. Question 3 - 40 The Federal Reserve regulates the money supply, true or false.

30. Answer 3 – 40 What is true?

31. Question 3 - 50 This 10% of all assets is the amount required by banks of the the Federal Reserve.

32. Answer 3 – 50 What is the required reserve?

33. Question 4 - 10 This is the price paid for the use of borrowed money.

34. Answer 4 – 10 What is simple interest?

35. Question 4 - 20 This is the term used for a stock market that is doing poorly.

36. Answer 4 – 20 What is a bear market? Bonus 10: What if the market is doing well?

37. Question 4 - 30 One of the advantages of corporations, LLCs and LLPs is this.

38. Answer 4 – 30 What is limited liability?

39. Question 4 - 40 This is something that is paid for by someone other than the producer.

40. Answer 4 – 40 What is an externality?

41. Question 4 - 50 This index is used to calculate inflation.

42. Answer 4 – 50 What is the Consumer Price Index?

43. Question 5 - 10 The Board of Governors of the Federal Reserve is made up of the 12 Federal Reserve Bank presidents and the Chairman of the Federal Reserve, true or false.

44. Answer 5 – 10 What is true?

45. Question 5 - 20 The number of districts in the Federal Reserve System.

46. Answer 5 – 20 What is 12?

47. Question 5 - 30 The Federal Reserve serves the government by selling securities, acting as the bank for the government and issuing currency, true or false.

48. Answer 5 – 30 What is true?

49. Question 5 - 40 This rate is the rate the Federal Reserve charges for loans to commercial banks.

50. Answer 5 – 40 What is the discount rate?

51. Question 5 - 50 The buying and selling of government securities to alter the money supply.

52. Answer 5 – 50 What are open market operations?