Federal Revenue and Taxation Flashcard

Front

As Kai's income increases, what happens to his tax rate?

Back

Both your marginal and average tax rates go up

Front

What is the annual shortfall in government revenues compared to government spending called?

Back

Budget Deficit

Front

During a discussion in their economics class, Ethan and Zoe were debating which type of economic issue fiscal policy is generally more effective in addressing. What would be the most appropriate scenario? Options: Promoting sustainable economic development, Mitigating short-term declines in consumer spending, Addressing mismatches in job skills, Overcoming production bottlenecks

Back

Mitigating short-term declines in consumer spending

Front

When Ava deposits her money in a bank, where does the majority of that money go?

Back

Banks use it to provide loans.

Front

In the United States, which entity is responsible for monetary policy?

Back

Federal Reserve System

Front

Which goal is most consistent with contractionary monetary policy? Options: Reduce joblessness, Expand the money supply, Control rising prices, Boost economic growth

Back

Control rising prices

Front

Charlotte is studying the effects of different monetary policies in her economics class. She learns that expansionary monetary policy is most likely associated with: Higher borrowing costs, Lower borrowing costs, Financial panics, Increased taxation

Back

Lower borrowing costs

Front

Is it accurate that central banks are always able to foresee and quickly respond to bring down inflation?

Back

Central banks might encounter opposition when raising interest rates.

Front

Scarlett is studying different banks for her finance project. Which bank is most likely to face a bank run? Options: Bank A introduces a new credit card with no annual fee. Bank B reports significant financial losses due to risky loans. Bank C announces a merger with a well-established financial institution. Bank D launches a marketing campaign to attract younger customers.

Back

Bank B reports significant financial losses due to risky loans.

Front

In which scenario is the Fed most likely to lower their administered rates, including lowering the IORB? Options: The economy is expanding rapidly and inflation rates are exceeding the desired level. The economy is facing a downturn and inflation is significantly below the target. Joblessness is at a historic low. The financial markets are experiencing a strong upward trend.

Back

The economy is facing a downturn and inflation is significantly below the target.