Government & Economics Questions and Answers Graded A+

Government & Economics Questions and Answers Graded A+ Capitalism/market economy An economic and political system characterized by a free market for goods and services and private control of production and consumption Competition...why the "lifeblood" of capitalism? it is the lifeblood because it helps prevent monopolys from forming Laissez-faire economics It describes a system that opposes interference by the government in economic affairs Law of supply and demand the effect that the availability of a particular product and the desire for that product has on price. Mixed Economy an economic system combining private and public enterprise. Socialism A system in which society, usually in the form of the government, owns and controls the means of production Government "safety net" programs that help the people the fall through the cracks. (lost of job ext.) command economy An economic system in which the government controls a country's economy. Free Trade international trade left to its natural course without tariffs or other restrictions. Protectionism the theory or practice of shielding a country's domestic industries from foreign competition by taxing imports Tariffs a tax or duty to be paid on a particular class of imports or exports. NAFTA an agreement signed by Canada, Mexico, and the United States, that encourages free trade in North American countries is the central bank of the United States. It was founded by Congress in 1913 to provide the nation with a safer, more flexible, and more stable monetary and financial system Role of the Federal Reserve...why such a big part of the U.S. economy? was created in 1914, its purpose was to prevent unfair methods of competition in commerce as part of the battle to "bust the trusts." FTC (Federal Trade Commission)...when established (year)...initially why established by President Woodrow Wilson? Inflation a general increase in prices and fall in the purchasing value of money. 1970's "Stagflation" high inflation combined with high unemployment and stagnant demand in a country's economy. NYSE...Dow Jones Industrial Average? S & P 500? Bull Market a market in which share prices are rising, encouraging buying. Bear Market a market in which prices are falling, encouraging selling. Economic Depression a sustained, long-term downturn in economic activity in one or more economies Economic Recession a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales Balanced Budget a budget in which revenues are equal to expenditures National Debt the total amount of money that a country's government has borrowed, by various means Progressive Taxation is a tax in which the tax rate increases as the taxable amount increases Regressive Taxation is generally a tax that is applied uniformly. This means that it hits lower-income individuals harder. Social Security...what it is...how is it funded... any government system that provides monetary assistance to people with an lacking the quantity required or no income. Sherman Anti-Trust Act (1890) A federal law passed in 1890 that committed the American government to opposing monopolies. The law prohibits contracts, combinations, or conspiracies "in the restraint of trade or commerce." Clayton Anti-Trust Act (1914) an amendment passed by the U.S. Congress in 1914 that provides further clarification and substance to the Sherman Antitrust Act of 1890. As leader of America's central bank, the Federal Reserve, Yellen has immense influence over global financial markets and the U.S. economy. Trillions of dollars can be lost or gained based on how investors interpret each word that comes out of Yellen's mouth. Janet Yellen...why an important person? A monopoly is a business that's the only provider of a good or service. This gives it a tremendous competitive advantage over any other company that tries to provide a similar product. They can create inflation. Since they can set any price they want, they will raise costs to consumers. A Monopoly and why they endanger the economy? The Discount Rate the minimum interest rate set by the Federal Reserve for lending to other banks. Gross- Net Gross vs. Net pay aka...Where did my money go!? Pre-Tax Benefits