EPF Final Exam study guide 2024 Questions & Answers

Identify the type of economy featured in the United States because the consumer controls the economy. - ANSWERSMarket Economy What term refers to having only one business produce a product and there is no substitute good? - ANSWERSMonopoly The four factors that affect production are - ANSWERSland, labor, capital, and entrepreneurial skill Any business that is associated with farming is called ___________. - ANSWERSAgribusiness What is the current national debt of the United States? - ANSWERS$28 trillion If the economy is in a recession, what will the Federal Reserve Board most likely do to initiate a recovery? - ANSWERSlower interest rates The alternating periods of growth and decline which the economy undergoes are called the - ANSWERSBusiness Cycle The ____ is the federal corporation that insures individual accounts in financial institutions up to $250,000. - ANSWERSFDIC What is a tax collected by federal government to pay benefits to those who are retired called? - ANSWERSSocial Security Tax The globalization of the world economy has had profound effects on work, on workers, and on wages. Open markets mean products come into America that are made by people who work for wages Americans can't live on. This can cost some American workers their jobs and keep others from getting a raise. But, overall, trade has brought vast benefits to most Americans. Jobs in exporting companies on average pay considerably higher wages than jobs in companies that sell only within the U.S. —Excerpt from an address by President Bill Clinton, January 1996 Which of these statements BEST reflects the point of view expressed by Clinton? - ANSWERSAlthough trade has some negative effects, overall it benefits most Americans Which of the following is an example of a progressive tax? - ANSWERSLow-income pays 10%, middle-income pays 15%, and high-income pays 30% The 16th Amendment guarantees what? - ANSWERSthe national government can collect income taxes How has the Covid-19 pandemic affected globalization? - ANSWERSit has decreased transportation and trade around the world Which global organization helps countries in conducting their business across international borders? - ANSWERSWorld Trade Organization What is foreign aid? - ANSWERSOne country offering assistance to another country. ____ means that people and nations all over the world now depend on one another for many goods and services. - ANSWERSGlobal interdependence After World War II, there was a major population increase in the USA. What generation is beginning to get older, living longer, and could possibly be a drain on Social Security? - ANSWERSBaby Boomers The Social Security Act (1935) is considered an important program because it - ANSWERSextended support to elderly Social Security tax: This tax helps fund retirement benefits for eligible individuals upon reaching retirement age. In 2024, the Social Security tax rate is 6.2%, but it only applies to the first $168,600 of earnings. Medicare tax: This tax helps fund Medicare, the healthcare program for people aged 65 and older. The Medicare tax rate is 1.45% and applies to all your earnings. Both employees and employers are responsible for paying FICA taxes. Each party contributes an equal share of 7.65% of an employee's earnings, split as 6.2% for Social Security and 1.45% for Medicare. What percentage of FICA taxes is withheld from your paycheck, assuming you make less than the Social Security wage base ($168,600 in 2024)? Hint: Consider the combined rate of both Social Security and Medicare taxes. What percentage of FICA is taken from every paycheck you receive? - ANSWERS7.65% What is the difference between gross pay and net pay? - ANSWERSNet pay describes your pay after deductions; gross is before