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Economics Unit 3 - Coggle Diagram

- - - - Revenue is the money the government gains from taxes. With their revenue, the government gainss the funds for what they need, and other benefits such as social security and health care such as Medicare.
        
        If the revenue exceeds the expenditures, there is a surplus. If the expenditures exceed the revenue, there is a deficit.
      - The government also spends money through Discretionary spending, which is money spent through the legislation process on things such as education and defenses.
- - - - Divisibility means that the money can be divided into smaller units.Uniformity means that the money of the same amount is completely similar.
      - Portability means that the money can be transferred easily even in small spaces. Acceptability means that the money is universally used as an object of trade within its specific region.
      - Limited supply means that there is a finite amount of that resource. Durability means that the object in question can survive wear and tear and still be acceptable.
      - Money that is considered M1 is money that can be immediately used as is in transactions and purchases. This includes checking accounts.
      - Money that is considered M2 is money that needs to first be converted into its worth in actual currency before being used. This is for savings deposits and mutual funds.
  - - - The Federal Funds Rate is the interest rate of overnight loans to other banks,
      - The Discount Rate is the interest rate on short term loans.
      - The Required Reserve Ratio is the amount of money any bank must keep on hand.
      - Open Market Regulations deals with government security,
- - - - Eminent domain is the government's ability to take private property for public use, but, as stated in the 5th amendment, can only do so if they pay for it.
- - - - Cyclical unemployment occurs due to negative changes in the economy which cause people to lose jobs.
      - Structural unemployment occurs when certain skills are no longer in demand.
      - Frictional employment occurs when someone is in the process of switching between jobs.
    - - One tools is known as the Contractionary Fiscal Policy. This allows the government to modify government spending and taxes.
      - Another tools at the government's disposal is the Expansionary Fiscal Policy. This allows the government increase spending and decrease taxes in order to incite economic growth.
      - The government can also control prices. It can interpret a price floor to essentially enforce a minimum wage through the prices of products and services. The government can also create a price ceiling if prices become too high for consumers to purchase.