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15 Cards in this Set
- Front
- Back
- 3rd side (hint)
Fiscal policy |
how the govt decides to collect and spend tax dollars |
there are 2 parts to fiscal policy: spending + taxes |
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aim of fiscal policy |
to ensure economic growth, full employment, price stability, and to provide services (i.e: defense, roads, schools, etc |
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What does the national govt spend $$ on? |
Taxes are spent on: national debt, national defense, direct payment to individuals (i.e: social security),and discretionary spending (i.e: trandportation, criminal justice, environment) |
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Who approves fiscal policies? |
ALL Legislators |
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Fiscal policy can help the economy ____ or _____ |
Fiscal policy can help the economy grow or slow down |
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how can Fiscal Policy help the economy grow? |
it can increase govt spending and reduce/cut taxes (which encourages people to spend MORE) |
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How can fiscal policy help the economy slow down? |
it can raise/increase taxes (which makes consumers spend less) and cut public spending |
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Monetary policy |
controls the growth rate of the money supply/regulation of money supply by Feds |
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Interest rate |
the percentage added to your payment each time |
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Federal Reserve Bank |
the bank's bank |
Feds |
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reserve requirement |
amount of money a bank must have (in case of an emergency) |
emergency money |
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Discount rate |
the rate that the Feds charge other banks |
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How can monetary policy help the economy grow? |
it can lower reserve requirements, lower the discount rate, and buy securities/bonds |
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How can monetary policy help the economy slow? |
it can help the economy slow by increasing the reserve requirements, increase the discount rate, sell bonds/securities |
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Taxes |
income the govt recieves from people and businesses. govr can increase/decreade taxes. |
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