Question

1. sales tax is a ______________ tax.
2. elasticity measures our responsiveness to price changes. life - saving medicine has ______________ demand because we would buy it regardless of how much it costs.
3. the law of supply states that as price increases, quantity supplied increases. however, sometimes this law does not apply. for example, even though the price of oranges may increase, the quantity supplied will not. the reason for this is that supply for oranges is ______________.

unit 3:
word bank: peak, trough, expansion, contraction, increase, increase, increase, increase, decrease, decrease, decrease, decrease, whole, inflation, buy, fiscal, inflation, money, spending, taxation, factor, product, congress, paycheck, labor, monetary, interest rates, government bonds, sell, business, gdp

1. macroeconomics is the study of the economy as a ____________. the president and __________ make __________ policy. the two tools of fiscal policy are __________ and government __________. if there is \too much money\ in the economy, __________ will occur. this means that prices are rising. in order to combat that, the president and congress will __________ taxes and __________ government spending. in a recession, the president and congress will __________ taxes and ____________ government spending (this is an expansionary fiscal policy).
2. the federal reserve controls the ____________ supply. __________ policy is controlled by the fed. the two tools of monetary policy are __________ and __________. in a recession, in order to increase the money supply, the fed will __________ interest rates and __________ government bonds. to combat inflation, the fed will __________ interest rates and ____________ government bonds.
3. ____________ is the total value of all goods and services produced in a country in a given year. the __________ cycle measures gdp. the highest point on the business cycle is the __________. the lowest point is the ____________. when the business

Explanation:

These questions are about economic concepts like macroeconomics, fiscal policy, monetary policy, GDP, and business cycles. The subfield of Business that applies here is Economics, as these topics are core to economic theory and policy.

Question 10:

Sales tax is a regressive (or sometimes considered a type of consumption) tax, but more accurately, in basic economics, sales tax is often categorized as a consumption or indirect tax. However, a common fill - in here related to tax types in economics (especially when considering proportional/regressive/progressive) is that sales tax is a regressive tax (since it takes a larger percentage of income from low - income earners) or a consumption tax. But if we go with the basic economic tax classification, a common answer is "regressive" or "consumption".

Question 11:

Life - saving medicine has inelastic demand. The concept of price elasticity of demand states that if a good is a necessity (like life - saving medicine) and there are few substitutes, the quantity demanded does not change much with price changes, so the demand is inelastic.

Question 12:

The reason the Law of Supply may not apply to oranges (in the short - run) is that the supply of oranges is inelastic (due to factors like fixed number of orange trees in the short - run, or perishable nature with a fixed harvest). Or another reason could be that the supply is "fixed" in the short - term, but the key economic concept here is price elasticity of supply. So the supply for oranges is inelastic (or has a limited ability to respond to price changes in the short - run).

Unit 3 Question 1:

• Macroeconomics is the study of the economy as a whole.
• The President and Congress make fiscal policy.
• The two tools of fiscal policy are taxation and government spending.
• If there is "too much money" in the economy, inflation will occur.
• In order to combat inflation, the President and Congress will increase taxes and decrease government spending.
• In a recession, the President and Congress will decrease taxes and increase government spending (this is an expansionary fiscal policy).

Unit 3 Question 2:

• The Federal Reserve controls the money supply. Monetary policy is controlled by the Fed.
• The two tools of Monetary Policy are interest rates and government bonds (or more precisely, open - market operations (buying/selling government bonds), reserve requirements, and discount rate; but from the word bank, we use "interest rates" and "government bonds" as placeholders).
• In a recession, in order to increase the money supply, the Fed will decrease interest rates and buy government bonds.
• To combat inflation, the Fed will increase interest rates and sell government bonds.

Unit 3 Question 3:

• GDP (Gross Domestic Product) is the total value of all goods and services produced in a country in a given year.
• The business cycle measures GDP.
• The highest point on the business cycle is the peak.
• The lowest point is the trough.

Answer:

s:

1. (Example) regressive (or consumption)
2. inelastic
3. inelastic (or fixed in short - run)

Unit 3:

1. whole; Congress; fiscal; taxation; spending; inflation; increase; decrease; decrease; increase
2. money; Monetary; interest rates; government bonds; decrease; buy; increase; sell
3. GDP; business; peak; trough