a- Taxes and Fiscal Policy: power points and class notes.
fiscal policy is a tax policy: socio-economic engineering; generates government revenue to pay for national security, internal security, health education and welfare, and infrastructure
economic development taxes: domestic (economic development and free trade zones), international (pioneer industry laws, preferential import/exports treatment, investment return remittances)
forms of taxation: income taxes (progressive), sales (regressive), income taxes are levied on (personal income, corporate income, investment income and estates/inheritances), excise taxes levied on (goods, services and international BOP transactions)
comparative tax analysis: world’s richest areas tend to be “high tax” society and world’s poor places are “low tax”, “bitchy society” is high maintenance
issues and observations: cradle to grave security, minimize government and maximize private initiatives, trade, flat tax and progressive tax
flat tax math – in 2014 a 20% flat tax generated 3.52 tril…. In 2015 flat tax generates 3.63 tril
tax impact on aggregate demand: sales tax increase drives the aggregate supply curve left and raises price, income tax rise drives the aggregate curve left and raises price, increase in both sales and income tax impose a “double whammy” on reducing supply and demand… this could cause inflation or even recession
b- Monetary System: Chapters 12 & 13, pages 235 to 251; Chapter 13, pages 259 to 276, plus 295 to 299; power points and class notes.
Run on bank – occurs when many depositors withdraw cash from their accounts all at once
Barter – system of exchange in which people directly trade one good for another; without using money
Commodity money – object in use as a medium of exchange hat also has a substantial value in alternative uses
Flat money – money that is decreed as such by the government. Little value as commodity, maintains a value of a medium of exchange because people have...