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2025 Econ Final
for Economics
| Question | Answer |
|---|---|
| This type of tax imposes the same percentage rate of taxation on everyone, regardless of income. Example? | Proportional Tax (ex. local income tax) |
| This type of tax imposes a higher percentage rate of taxation on higher incomes than on lower ones. Example? | Progressive Tax (ex. federal income tax) |
| This type of tax imposes a higher percentage rate of taxation on lower incomes than on higher ones. Example? | Regressive Tax (ex. sales tax) |
| What is the name of the government agency responsible for managing the federal income tax? | The Internal Revenue Service |
| What is the name for an expense that you are not required to pay taxes for according to current tax law? | Tax Deduction |
| What is the name of money that your receive back from the government if you paid more than the required amount for the previous years taxes? | Tax Return |
| What are two kinds of federal payroll taxes (money withheld from you paycheck) other than federal income tax? | Social Security and Medicare |
| This kind of tax is paid by publicly traded businesses for profits made during the year. | Corporate Income Tax |
| This kind of tax is levied on the manufacture or sale of selected items such as gasoline, alcohol, or cigarettes. | Excise Tax |
| This kind of tax is levied on the transfer of property when a person dies. | Estate Tax |
| This kind of tax is charged on goods brought into the United States from another country. | Customs Duties |
| What kind of tax on trade is prohibited under the U.S. Constitution? | Export Taxes |
| This kind of tax is charged on the transfer of money or wealth from one person to another | Gift Tax |
| What is the name for the dollar amount that tax payers may automatically subtract from their income before income tax is applied | The Standard Deduction |
| Name three factors that influence the legal minimum wage rate by location? | Federal law, cost of living, inflation, political party in power, labor supply in a given market or industry |
| What is the current federal minimum wage, first going into effect in 2009? | $7.25 per hour |
| Name two common arguments in favor of increased minimum wage? | Increased standard of living, Increased consumer spending, reduced poverty |
| Name two common arguments opposed to an increased minimum wage? | Increased inflation, loss of jobs, no actual effect on poverty or standard of living |
| What are three strategies regularly employed by labor unions to leverage their bargaining power? | Strikes, picketing (protest), boycotts |
| What is the name for the kind of law that allows individuals to seek employment regardless of union affiliation or non-affiliation? | Right-to-work laws |
| This is a type of labor agreement where an employer can only hire employees who are already members of the union representing the workforce | Closed Shop |
| This is a type of labor agreement where the employer agrees to either only hire labor union members or to require that any new employees who are not already union members become members | Union Shop |
| This is a type of labor agreement where all employees, whether union members or not, contribute to the union's cost of representing them through a service fee | Agency Shop |
| This 1938 law that established minimum wage, overtime pay requirements, recordkeeping, and child labor standards for most employees in private and public sector work | The Federal Labor Standards Act |
| This 1935 law established the legal right for most private-sector workers to organize into unions and engage in collective bargaining. | The Wagner Act (National Labor Relations Act) |
| This 1932 law prohibited employers from denying employment on the basis of union membership (yellow-dog contracts) | The Norris-LeGuardia Act |
| This is one of the two key tools for managing the economy: the government's use of spending and taxation to influence the economy. | Fiscal Policy |
| This is one of the two key tools for managing the economy: the nation's central bank influences the money supply and credit conditions in the economy | Monetary Policy |
| Use of gov't budgetary tools to reduce economic growth (inflation) via reduced gov't spending and/or increased taxation | Contractionary Fiscal Policy |
| Use of gov't budgetary tools to stimulate economic growth via increased gov't spending and/or decreased taxation | Expansionary Fiscal Policy |
| Economic policy actions taken to reduce the money supply by raising interest rate and/or raising reserve requirements for banks | Contractionary Monetary Policy |
| Economic policy actions taken to increase the money supply by lowering interest rate and/or decreasing the reserve requirements for banks | Expansionary Monetary Policy |
| This 1890 law prohibited any contract, combination, or conspiracy in restraint of trade or commerce, including attempts at monopolization. | the Sherman Antitrust Act |
| This 1914 law prohibited specific anti-competitive practices like price discrimination, exclusive dealing agreements, tying contracts, and corporate mergers that substantially lessen competition. | the Clayton Antitrust Act |
| This 1914 law established a gov't agency to prevent unfair methods of competition and unfair or deceptive acts or practices affecting commerce | the Federal Trade Commission Act |
| This 1936 law prohibited price discrimination in interstate commerce, specifically for commodities. It was designed to protect small retailers from large chain stores. | the Robinson-Patman Act |
| This is the term for the average difference between the remuneration (earnings/payment) for different groups (gender/race/age, etc...) who are employed | the Wage Gap |
| Traditional Economy | The use of scarce resources stems from ritual, habit, or custom. Economic decisions are made by ancestors or elders. |
| Market Economy | The use of scarce resources is dispersed throughout the society. Economic decisions are made by individuals. |
| Command Economy | The use of scarce resources is determined by a central authority. Economic decisions are made by the government. |
| Mixed Economy | The only kind of economic system that exists in the real world. All other systems are theoretical ideals. |
| Socialism | Basic productive resources are gov't owned, the rest are privately owned. Gov't plans and directs allocation of resources in key industries. |
| Capitalism | Productive resources are privately owned and operated. Resources for production are obtained by individuals' desire for profit but the gov't may promote competition and provide public goods. |
| Communism | All productive resources are gov't owned and operated, centralized planning directs resources, and gov't makes all economic decisions. |
| Circular Flow Matrix | Model depicting the interchange of resources and products in a market economy. |
| Name 3 examples of command elements in the US economy: | Monopoly Laws, Emissions Standards, Quality Assurance Laws, Licenses |
| In the circular flow matrix, businesses sell goods and services where? | The product market |
| What is money paid to businesses for goods and services called? | Revenue |
| What is money paid by businesses for resources called? | Costs |
| What is money paid to households for resources called? | Income |
| What is money paid by households for goods and services called? | Spending |
| What kind of income is paid for land? | Rent |
| What kind of income is paid for capital? | Interest |
| What kind of income is paid for labor? | Wages |
| What kind of income is paid for entrepreneurs? | Profits |
| What is government money given as incentives to businesses called? | Subsidies |
| What is government money given directly to households called? | Welfare |
| What is money given by businesses and households in exchange for public goods? | Taxes |
| Monopoly | Market structure with only one seller of a particular product. |
| Oligopoly | Market structure in which a few very large sellers dominate an industry. |
| Monopolistic Competition | Market structure that has all the conditions of perfect competition except identical products. |
| Perfect Competition | A market structure characterized by a large number of well informed independent buyers and sellers who exchange identical products. |
| Benefits of competition: | Higher quality goods and services, improved service, lower prices, increased innovation , more adaptive workforce |
| In the circular flow matrix, households sell the factors of production where? | The resource market |
| Advantages of a command economy: | Capable of quick, dramatic change; many basic public services available at little or no direct cost |
| Disadvantages of a command economy: | Does not meet the needs and wants of consumers; Lacks effective incentives to get people to work; Requires large bureaucracy, which consumes resources; Has little flexibility for day to day change; Inefficient allocation of resources |
| Advantages of traditional economies: | Sets forth clear economic roles for all members of the community; stable, predictable, and continuous life |
| Disadvantages of a traditional economy: | Discourages new ideas; Stagnation and lack of progress; Lower standards of living |
| Advantages of market economies: | Individual freedom; capable of gradual adjustment to change; lack of gov't interference; high variety of goods and services; higher degree of consumer satisfaction; higher standards of living |
| Disadvantages of market economies: | rewards only productive resources (not the young, old, or sick); does not produce public goods; workers and businesses face uncertainty from competition or change |
| Mercantilism | A state-driven economic system which emphasizes the build up of mineral wealth by means of a favorable balance of trade. |
| Feudalism | Economic system in which the nobles held lands from the monarch in exchange for military service and poor farmers exchanged labor to nobles for protection |
| Fascism | Sometimes characterized as "far right," an economic system characterized by total state control, with some private property, aimed at the supremacy of the nation over the individual and the world |
| Good | Tangible economic product that is useful, relatively scarce, transferable to others; used to satisfy wants and needs |
| Economics | social science dealing with the study of how people satisfy seemingly unlimited and competing wants with the careful use of scarce resources |
| Need | basic requirement for survival; includes food, clothing, and/or shelter |
| Scarcity | fundamental economic problem facing all societies that results from a combination of limited resources and people's virtually unlimited wants |
| Want | something we would like to have but it is not necessary for survival |
| Factors of Production | productive resources that make up the four categories of land, capital, labor, and entrepreneurship |
| Land | natural resources or "gifts of nature" not created by human effort; one of four factors of production |
| Capital | tools, equipment, and factories used in the production of goods and services; one of four factors of production |
| Labor | people with all their abilities and efforts; one of the four factors of production, does not include the entrepreneur |
| Entrepreneur | risk-taking individual in search of profits who provides the original idea for a business; one of four factors of production |
| Gross Domestic Product | dollar value of all final goods, services, and structures produced within a country's national borders during a one-year period |
| Service | work or labor preformed for someone; economic product that includes haircuts, home repairs, forms of entertainment |
| Value | worth of a good or service as determined by the market |
| Paradox of Value | apparent contradiction between the high value of a nonessential item and the low value of an essential item |
| utility | ability or capacity of a good or service to be useful and give satisfaction to someone |
| wealth | sum of tangible economic goods that are scarce, useful, and transferable from one person to another; excludes services |
| Economic Growth | increase in a nation's total output of goods and services over time |
| Productivity | measure of the amount of output produced with a given amount of productive factors; normally refers to labor, but can apply to all factors or production |
| human capital | sum of peoples' skills, abilities, health, and motivation |
| Specialization | division of work into a number of separate tasks to be preformed by different workers |
| opportunity cost | the loss of the next best alternative use of money, time, or resources when one choice is made rather than another |
| economic model | simplified version of a complex concept or behavior expressed in the form of an equation, graph, or illustration |
| cost-benefit analysis | way of thinking that compares the cost of an action to its benefits |
| Standard of Living | quality of life based on ownership of necessities and luxuries that make life easier |
| Commodity | Kind of money where items of value are traded of other items of roughly the same value: |
| Representative | Kind of money where a paper note can be exchanged at a financial institution for pre-determined amount of valuable goods (i.e. gold, etc...) |
| Fiat | Kind of money based on trust in the stability and power of the government that mints currency: |
| 1900 | When did the first paper money get created in the United States? |
| Three basic questions of economics: | What to produce? How to produce it? For whom to produce? |
| Inflation | a persistent, substantial rise in the general level of prices related to an increase in the volume of money and resulting in the loss of value of currency |
| Which statistic measures the total size of an economy? | GDP |
| Which measures (roughly) the average wealth of individuals in an economy? | GDP per capita |
| Which is better for comparing a countries economic growth from year to year? | Real GDP |
| What is generally considered to be a healthy level of inflation for a developed economy? | 3% |
| At 3% inflation prices double every... | 24 years |
| TINSTAAFL | There Is No Such Thing As A Free Lunch |
| Structural | Type of Unemployment that involves changes in the structure of the labor market that make some skills obsolete. Most of these jobs will never come back. |
| Frictional | Type of unemployment where people are temporarily unemployed or between jobs |
| Cyclical | Type of unemployment that results from an economic downturn or recession. Drop in demand for goods & services result in drop in demand for labor and employers are forced to lay off workers. |
| Natural Rate of Unemployment | 3-6%, sum of structural & frictional unemployment (two kinds of unavoidable unemployment) |
| Highest Unemployment in US History | Great Depression 25.6% |
| What 2 categories of people with major financial needs are not calculated in the unemployment rate? | the underemployed and discouraged workers (those who have stopped looking for a job) |
Created by:
dosselaer
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