Economic Policy Chapter 14 Part II

If I Had $1,000,000 If You Had $1 Million, Would You in Fact Be Rich?Fill in the blanks with the corresponding words. The Barenaked Ladies seem like a generous band. Quite generous, in fact. After all, if they had $1 million, there are all sorts of things they would buy you. Several questions come up, most notably: Could you afford to actually buy all the things the singers want to buy with $1 million? And after ringing up all those purchases, would you still be rich?Now, a few rules before we get going. As The Knack told us, you can’t put a price on love, so that’s not in the final tally. Similarly, we can’t put a price on John Merrick’s remains, though it remains to be seen who would actually want all them crazy elephant bones.First up is the big purchase: the house. As of the third quarter of 2019, themedian price of houses sold in the U.S.was $310,900. That’s nearly one-third of the singers’ wealth right there. Then there’s the cost of furniture for the house (like a nice chesterfield or ottoman). This amount will depend on individual tastes and the home’s size, but we’ll ballpark it at $20,000. And then there’s the cost of the car. The Plymouth Reliant K is hard to find, but a quick search turns up models still out there for a few thousand dollars. We’ll call this one $2,000.Similar to furnishing a house, a tree fort can cost relatively little or can be as expensive as a small house. In this case, the band is on the more expensive side if it’s a treehouse that can accommodate a fridge. We’ll call it $50,000 for the treehouse and another $150 for the mini-fridge.The band will save money by opting for the fake fur coat over the real one. (And avoid being cruel.) That’ll run about $250. The exotic pet will cost a little more, with a llama running about $3,000.Even though the band already bought a car, now it’s time for the limo to go to the store. They could buy one outright for about $60,000. There’s also the green dress; let’s budget $100.Hopefully, the llama and the monkey will get along well. The monkey would run about $6,000.For buying art, we’ll focus on a Picasso rather than Garfunkel. In 2013, a Picasso paintingsold for $155 million, well outside the Barenaked Ladies’ price range. However, there are a number of lesser-known but more affordable works available for around $15,000.Theestimated total comes to $467,400, leaving the band with a little over half a million dollars. So, after all those purchases, would the band be rich? Remember, they’re buying all this stuff for someone else.It really depends on how you measure being “rich.” According to the Fed’s Survey of Consumer Finances, thenet worth of the median family(or the family right in the middle if you lined everyone up according to net worth) was $97,300 in 2016, so the band would certainly be wealthy by comparison. However, themean (or average) net worthwas $692,100, leaving the band below average.Still, there are worse places to be, especially now that they can eat all the Kraft dinners they want. Government Regulation: Crash Course Government and Politics #47 After watching the video clip (9:48) on Government Regulation of the Economy, answer the following questions. The governments economic goals are Relatively small Relatively big The same as an individual's Our government has a goal promoting stable markets. Most of the things the government does to create a market system also work to make the system stable and predictable. Maintaining law and order and minimizing monopolies are examples of government actions that make the market system stable. What is another government action that helps to stablize our market? National regulations like automobile fuel efficiency standards. Setting amounts for police tickets and fines. Setting fines on overdue library books. Fill in the blanks with the correct words from the Government Regulations CC #47 transcript below. "...Government promote prosperity. It tries to keep a positive investment climate and build confidence in the economy. One way the federal government can accomplish this is through regulating financial markets through the Securities and Exchange Commission, since people won’t want to invest in the securities markets if they think the game's fixed. Another thing the government can do, if it’s feeling particularly Keynesian, is to spend money on public investment in things like highways and the internet. While not actually built by Al Gore, it did begin with a government program out of the Defense Department. The government also pays for research through the National Institutes of Health and the National Science Foundation, and enhances the workforce through education policy and immigration policy, all of which contribute to national prosperity. A third goal of government economic policy, one closely related to the first two, is promoting business development. Many people would probably argue that promoting business development and promoting prosperity are the same thing, but policies aimed at helping businesses are slightly different and more focused than those targeting the broader goal of promoting prosperity. The main ways that the federal government promotes business development are through tariffs and subsidies. Since the Great Depression, the U.S. has pretty much pursued a policy of free trade, which means lowering tariffs on most things, which by forcing them to compete, can hurt businesses, at least in the short run..." After reading this passage, identify the following statements as True or False .The fourth goal of government economic policy is to protect consumers and employees. A lot of people will tell you that the federal government doesn’t do much to protect employees these days, and those people are probably right, but in the past it certainly did. The government made unionization easier with the National Labor Relations Act and set labor standards, especially overtime rules with the Fair Labor Standards Act. Both of these were passed in the 1930s, by the way. Probably the most notable thing that the government does to protect workers these days is set the federal minimum wage. On the other hand the Occupational Safety and Health Administration does set up regulations to prevent workers from breathing in hazardous fumes and protect them from other potentially life threatening workplace conditions, and that’s a good thing. As far as consumers are concerned, there are thousands of regulations that protect us to make sure that the things we buy don’t kill or maim us. The Food and Drug Administration makes sure that our medicines aren’t poison, and the Department of Agriculture inspects meat, which I think is really good a idea, actually. The National Traffic and Motor Vehicle Safety Act of 1966 made cars safer, and the Consumer Products Safety Commission helps keep lead paint out of our toys and saves us from exploding toasters. All of these goals of economic policy, promoting stable markets, promoting economic prosperity, fostering business development and protecting employees and consumers are interrelated and important.EXAMPLE: A goal of government economic policy is to protect consumers and employees TRUE False The government made unionization harder with the National Labor Relations Act and set labor standards. True False The Occupational Safety and Health Administration does set up regulations to prevent workers from breathing in hazardous fumes and protect them from other potentially life threatening workplace conditions. True False As far as consumers are concerned, there are a few regulations that protect us to make sure that the things we buy don’t kill or maim us. True False The Food and Drug Administration makes sure that our medicines aren’t poison, and the Department of Agriculture inspects meat. True False All of these goals of economic policy, promoting stable markets, promoting economic prosperity, fostering business development and protecting employees and consumers are interrelated and important. True False Matching Match the terms with their meetings. Flat tax A tax system in which all people pay the same percentage of their income Globalization The process by which businesses or other organizations develop international influence or start operating on an international scale. Internal Revenue Service (IRS) The branch of the U.S. Treasury Department in charge of collecting taxes mandatory spending Federal spending required by law that continues without the need for annual approvals by Congress. Discretionary spending Federal spending on programs that are controlled through the regular budget process; example National Endowment for the Arts (funds Sesame Street) Patient Protection and Affordable Care Act (PPACA) 2010 federal legislation designed for comprehensive health reform, with an intent to expand coverage, control health care costs, and improve the health care delivery system (aka Obama Care) progressive tax A tax for which the percentage of income paid in taxes increases as income increases Reserve requirement The percentage of deposits that banking institutions must hold in reserve (not lend out; a form of insurance) "Fiscal Policy" | St. Clair AP Macro Economics Watch the Music Video (Less than 4 minutes long) In 25 words or less, what did you learn from watching the music video.