American Government Final Pat. 7

How did the 16th Amendment change the US government's power?

• Congress has the power to levy an income tax.

• Senators are now directly elected by the people.

How do federally required payroll taxes contribute to the US government?

• Although a regressive tax, it pays for Social Security and Medicare.

• Despite being a progressive tax, it encourages unemployment.

What is the purpose of a federal bond?

• to borrow money to cover government spending

• to take money out of circulation to prevent inflation

What is federal debt?

• The amount of money the federal government has borrowed but not yet repaid.

• The amount of money the government needs to cover mandatory spending.

What is mandatory spending?

• The amount of money the federal government is obligated to allocate to federal programs.

• The amount of money the federal government needs to pay federal tax returns to citizens.

What is discretionary spending?

• Congressional spending of government programs that are subject to the annual budget process.

• Congressional allocations to executive programs such as Social Security, Medicare, and Welfare.

What is the goal of Fiscal Policy?

• to provide adequate funds for government without affecting the overall economy

• to promote the general welfare by providing effective but fair tax policies

How does the Federal Reserve control the nation's monetary policy?

• It controls the amount of money in circulation and the interest rates at which money is borrowed

• It prevents the government from taking financial advantage of privately owned businesses