PUP Test 2, PUP 3002: Chapter 5-8 Exam 2, PUP
3002: Exam 2 Review – Questions With Reliable
Solutions
Save
Terms in this set (276)
increase in a nation's total output of goods and
Economic growth
services over time
this is desirable because inflation affects the price
Low inflation
producers pay to produce goods
(desired but not achievable) an unemployment rate
Full employment
of 4 to 5 percent
when the amount exported is more than the amount
Positive balance of trade
imported
says that supply and demand are natural regulatory
Classic model
tools and the economy regulates itself
"hands off" Idea that government should play as
Laissez-faire
small a role as possible in economic affairs.
Gross Domestic Product a measurement of the total goods and services
(GDP) produced within a country.
an economic theory based on the thoughts of
British economist John Maynard Keynes, holding
that central banks should adjust interest rates and
Keynesianism
governments should use deficit spending and tax
policies to increase purchasing power and hence
prosperity.
a series of reforms enacted by the Roosevelt
New Deal administration between 1933 and 1942 with the goal
of ending the Great Depression.
, New Deal agency that helped create jobs for those
Works Progress
that needed them. It created around 9 million jobs
Administration
working on bridges, roads, and buildings.
government policy that attempts to manage the
Fiscal policy
economy by controlling taxing and spending.
government policy that attempts to manage the
Monetary policy economy by controlling the money supply and thus
interest rates.
involves government intervention in the decisions
Regulation
that firms make or in market outcomes.
responsible for managing the supply of money in
Federal reserve board
the economy
involves wealthier members of society paying a
Progressive taxation higher portion of their incomes as taxes (ex:
property tax, sales tax on luxury goods)
All people pay the same amount of taxes regardless
flat tax
of their income (ex: Social Security and Medicare)
When poorer persons pay a larger share of their
regressive taxation income (ex: sales tax and excise taxes on alcohol
and tobacco)
refers to who pays the tax (see page 157 in
Tax incidence
textbook)
may involve an outside source, like a government, to
establish a price ceiling or floor on an industry with
Price setting
limited competition (ex: US gov and stats set prices
for for Medicaid)
examples are licensing fees and certificates needed
Entry restrictions
for certain jobs
a form of economic protection for a trade (ex:
physicians must be certified by examiners, this
Barriers to entry
creates barriers for unqualified people seeking to
practice medicine)
approach to economics which favors tax cuts which
Supply-side
leads to less progressive taxation
, similar to supply side, says that tax breaks for
Trickle Down Economics corporations and the wealthy will trickle down to
everyone else
says that tax cuts can lead to an increase in tax
Laffer curve
collections
a form of tax incentives in which a reduction of
Tax deductions
income is able to be taxed
revenue losses that result from special exemptions,
Tax expenditures
exclusions, or deductions on federal tax law.
measures the number of people in the non-
institutionalized civilian work force (people not in
Unemployment
prison or other institutions who are 16 or over) that
do not have a job
making decisions with a blind eye to extraneous
Veil of ignorance
factors that could affect the decision
the extent of the difference in total earnings
Income inequality
between the highest income people in the area
involves taking from the people who have income
Redistribution and giving it to people who do not have enough
income
programs in which eligible persons receive checks
Cash transfer
each month
federal program of disability and retirement benefits
Social Security
that covers most working people
when the government intervenes in the insurance
Social insurance market to ensure that a group of individuals are
insured
a type of policy that takes benefits (usually through
Redistributive policy taxes) from one group of Americans and gives them
to another (usually through spending).
involves officials determining whether persons have
Means tested
income low enough to qualify for benefits
3002: Exam 2 Review – Questions With Reliable
Solutions
Save
Terms in this set (276)
increase in a nation's total output of goods and
Economic growth
services over time
this is desirable because inflation affects the price
Low inflation
producers pay to produce goods
(desired but not achievable) an unemployment rate
Full employment
of 4 to 5 percent
when the amount exported is more than the amount
Positive balance of trade
imported
says that supply and demand are natural regulatory
Classic model
tools and the economy regulates itself
"hands off" Idea that government should play as
Laissez-faire
small a role as possible in economic affairs.
Gross Domestic Product a measurement of the total goods and services
(GDP) produced within a country.
an economic theory based on the thoughts of
British economist John Maynard Keynes, holding
that central banks should adjust interest rates and
Keynesianism
governments should use deficit spending and tax
policies to increase purchasing power and hence
prosperity.
a series of reforms enacted by the Roosevelt
New Deal administration between 1933 and 1942 with the goal
of ending the Great Depression.
, New Deal agency that helped create jobs for those
Works Progress
that needed them. It created around 9 million jobs
Administration
working on bridges, roads, and buildings.
government policy that attempts to manage the
Fiscal policy
economy by controlling taxing and spending.
government policy that attempts to manage the
Monetary policy economy by controlling the money supply and thus
interest rates.
involves government intervention in the decisions
Regulation
that firms make or in market outcomes.
responsible for managing the supply of money in
Federal reserve board
the economy
involves wealthier members of society paying a
Progressive taxation higher portion of their incomes as taxes (ex:
property tax, sales tax on luxury goods)
All people pay the same amount of taxes regardless
flat tax
of their income (ex: Social Security and Medicare)
When poorer persons pay a larger share of their
regressive taxation income (ex: sales tax and excise taxes on alcohol
and tobacco)
refers to who pays the tax (see page 157 in
Tax incidence
textbook)
may involve an outside source, like a government, to
establish a price ceiling or floor on an industry with
Price setting
limited competition (ex: US gov and stats set prices
for for Medicaid)
examples are licensing fees and certificates needed
Entry restrictions
for certain jobs
a form of economic protection for a trade (ex:
physicians must be certified by examiners, this
Barriers to entry
creates barriers for unqualified people seeking to
practice medicine)
approach to economics which favors tax cuts which
Supply-side
leads to less progressive taxation
, similar to supply side, says that tax breaks for
Trickle Down Economics corporations and the wealthy will trickle down to
everyone else
says that tax cuts can lead to an increase in tax
Laffer curve
collections
a form of tax incentives in which a reduction of
Tax deductions
income is able to be taxed
revenue losses that result from special exemptions,
Tax expenditures
exclusions, or deductions on federal tax law.
measures the number of people in the non-
institutionalized civilian work force (people not in
Unemployment
prison or other institutions who are 16 or over) that
do not have a job
making decisions with a blind eye to extraneous
Veil of ignorance
factors that could affect the decision
the extent of the difference in total earnings
Income inequality
between the highest income people in the area
involves taking from the people who have income
Redistribution and giving it to people who do not have enough
income
programs in which eligible persons receive checks
Cash transfer
each month
federal program of disability and retirement benefits
Social Security
that covers most working people
when the government intervenes in the insurance
Social insurance market to ensure that a group of individuals are
insured
a type of policy that takes benefits (usually through
Redistributive policy taxes) from one group of Americans and gives them
to another (usually through spending).
involves officials determining whether persons have
Means tested
income low enough to qualify for benefits
